Presstek will initially provide $7m in debtor-in-possession financing in order to allow AB Dick to continue trading and honour current client commitments.

Presstek chief executive Ed Marino (pictured) said: "We believe AB Dick is a fine company. They certainly need the strengthening and refocusing that a company like Presstek can provide as well as the resources.

"They serve a marketplace that is very attractive to us, which is the small commercial print market."

Marino stressed that the UK branch of AB Dick, which is a separate financial entity, will not be directly affected by the deal.

"It's a strengthening move. Part of what Presstek can bring to the party is digital technologies and products. We would hope to infuse more and more technology and digital products and services into AB Dick's market."

"It's particularly true in Britain because we already do business with AB Dick (UK). This will take us a step further."

AB Dick (UK) managing director Quen Baum said that he was "over the moon" with the deal. He said: "I've worked with the Presstek team for several years now and they are awesomely talented."

"There will be no immediate change this is business as usual, and just a change of ownership. In the longer term, it's hugely exciting to be owned not by a finance house but by a company with direct interests in printing technology."

The deal, which under US law is subject to bankruptcy court approval, should be completed within two to three months.

Marino said: "Should we be successful with this, our intent is to run AB Dick as an independent business unit. We believe there is value in the brand."

Marino said that Presstek's financing for the deal was secure. "This will be a cash transaction. We have a fairly large cash reserve at the moment, as we ended the last quarter with over $32m in cash. In addition to that, we will be extending our cash line from the bank."

The sale comes two weeks after AB Dick creditor MHR Capital Partners filed papers with Delaware Court of Chancery with the aim of forcing the press manufacturer to give it a seat on the board of directors (PrintWeek, 8 July 2004).

MHR Capital held around 10m ($18.4m) of the 13.6m ($25m) debt issued by AB Dick parent company Paragon Corporate Holdings during financial restructuring in 2001.

There was no answer when PrintWeek tried to contact AB Dick (USA) chief executive Brian Longe.

Story by Josh Brooks