NEW YORK (Reuters) – Printer maker TallyGenicom LP said on Tuesday it filed for Chapter 11 bankruptcy protection to help facilitate the sale of its U.S. assets to competitor Printronix Inc.
The company, which filed for bankruptcy in a Delaware court, asked the bankruptcy court to name Printronix as the lead bidder in an auction of its U.S. assets. TallyGenicom said the U.S. economic recession and tight credit markets have hurt sales of its printers used for bar codes and invoices.
Companies are increasingly using bankruptcy court to help speed up mergers or sales since bankruptcy can strip out onerous debts or pension obligations owed by the company being bought.
Separately, Printronix said it wants to buy TallyGenicom’s intellectual property, inventory and equipment to integrate their printer series with its own.
The sale, if approved, is expected to take 45 days, the companies said. Printronix said it expects “some TallyGenicom employees could join Printronix, but will make final staffing decisions upon completion of the transaction.”
TallyGenicom makes printers and printer supplies used by such industries as retail and manufacturing to create bar codes, labels and invoices. Printronix develops bar code technology used by automotive and other industries.
In January, Printronix, which had been publicly traded, was bought by Pioneer Holding Corp, an entity controlled by San Francisco-based private equity firm Vector Capital.
The case is In re TallyGenicom LP, US Bankruptcy Court for the District of Delaware, No. 09-10266. (Reporting by Chelsea Emery; editing by Jeffrey Benkoe)