LVI, formerly known as LaVigne, Inc., filed for protection under Chapter 11 on July 13 with the intent to reorganize the company through the sale of its assets. Today LVI and DS Graphics announced that they have entered into a court-approved asset purchase agreement.

At the time of the bankruptcy filing, LVI announced that HubCast Inc., had submitted a bid to purchase its assets and acquire some of the company’s debt. Toby LaVigne, founder and CEO of HubCast, was chairman and majority shareholder of LaVigne.

While unwilling to divulge the exact details of the purchase, Jeff Pallis, president of DSG Graphics, did say that DSG had “advanced a higher cash offer with fewer ‘cures’ in the offer” than the HubCast bid.

The sale is expected to close on Tuesday, August 25, or Wednesday, August 26, and the new entity will be in place by the end of the week. It will be 90 to 180 days before the two companies are completely integrated.

DSG is expecting to take on the staff from LVI for permanent employment and will honor the largest of the existing current customer contracts.

The DSG plant is located in Lowell, MA, about 40-45 minutes from LVI in Worcester, MA. Employees outside the Worcester area are likely to see the same or a shorter commute when the two plants have been merged.

In February 2006, DS Graphics acquired Fidelity Communications (PDF link), a commercial sheetfed company specializing in personalized one-to-one direct mail marketing. “After the Fidelity acquisition, we doubled business from current customers,” said Pallis. “We anticipate that we will see that again with the LVI acquisition.”

LVI revenues were expected to be about $6 million for 2009; after the merger sales are projected to increase to $9 million the first year and $12 million by year two. Last year, 2008, was a record year for DSG and sales for this year are flat or down slightly.

Pallis added, “We will combine the best of both to create a new organization. We will combine the talents and knowledge of both companies to give our customers the highest quality service with the best technology.”

Chris Wells, president/CEO of LVI, will stay on as part of the management team at DSG. “We haven’t settled on his new title,” said Pallis, “but Chris will be developing new business ideas. He will look at our technology spread and develop new offerings; including developing new business from existing LVI relationships.”

The integration of technology will involve taking the best from both organizations. For example, LVI offset technology was last updated in 2001 and DSG has a new Heidelberg 10 color press that has dropped makeready to 20 minutes. Both companies had been using the same print management system, which will make integration smoother.

The merger will combine Xerox iGens from DSG with HP Indigo from LVI to expand the product offerings that will reach from long run 40” offset to POD and digital offset for short runs.

DSG is a full service print, fulfillment, and mailing company generating 60% of its revenue from print.