A newly formed Buffalo company that is half-owned by an Indian printer said it has acquired the assets of a struggling local commercial printer and graphics communications business, gaining a client roster that includes the Buffalo Bills.
Chakra Communications did not say how much it paid Digicon Imaging's secured creditors to buy the Buffalo business, which generates annual revenues of more than $10 million.
The deal, which closed on Dec. 28, includes Digicon's Creative Printing division in Endwell, Broome County. Chakra also hired more than 70 Digicon employees with extensive printing and Internet services experience, about 50 of them in Buffalo.
Digicon was struggling due to competitive pressures and the consolidation of the printing industry, and owed money to several lenders, said Tim Lafferty, Chakra's vice president of sales and marketing. But instead of declaring bankruptcy, its management sold its business to Chakra under Article 9 of the Uniform Commercial Code, paying off about a half-dozen, though not all, of its creditors.
Chakra was formed solely for this purpose. The company is half owned by Pittsford-based small business investment company Cephas Capital Partners LP, a lender and one of Digicon's creditors, which converted its debt into equity ownership of Chakra.
The other half of Chakra is owned by Inquilab Offset Printers of Bombay, India, which was brought into the deal by a former Digicon manager who now has a business relationship with Inquilab, Lafferty said. The manager had left Digicon, but has returned.
Chakra is now being run by a team of five vice presidents, who report to the chairman, an employee of Inquilab who is based in India. Only two of the five vice presidents are from Digicon, including Lafferty and production manager Joe Griffin. The other three are new to the management team. Lafferty said officials plan to hire a local CEO in a few months.
Chakra is named for a Sanskrit word that means "wheel," signifying constant, progressive and inventive forward motion. With the acquisition, the company now offers Internet and Website services, digital data management, digital image repurposing and management, prepress, printing and related services.
Besides the Bills, its clients now include Delaware North Companies, University at Buffalo, FYE music and video stores, General Nutrition Centers, Cornell University, Fidelity Employer Services, Erie Insurance, Visions Federal Credit Union, Disney Publishing and Simon & Schuster New Media.