Portrait Corporation of America Inc. has entered into a definitive agreement with CPI Corp. to sell substantially all of the company’s operating assets and its foreign and domestic affiliates for $100 million in cash, subject to certain closing adjustments, and the assumption of certain liabilities. On Aug. 31, 2006, PCA and certain of its direct […]

Portrait Corporation of America Inc. has entered into a definitive agreement with CPI Corp. to sell substantially all of the company’s operating assets and its foreign and domestic affiliates for $100 million in cash, subject to certain closing adjustments, and the assumption of certain liabilities.

On Aug. 31, 2006, PCA and certain of its direct and indirect subsidiaries filed voluntary petitions for relief under the Bankruptcy Code, commencing jointly administered chapter 11 cases before the United States Bankruptcy Court for the Southern District of New York. The parties intend to consummate the transaction under Sections 363 and 365 of the Bankruptcy Code. The transaction is subject to certain conditions, including the approval of the Bankruptcy Court and other governmental regulatory approvals. PCA will file a motion seeking approval of the asset purchase agreement. The parties expect the Bankruptcy Court to conduct a hearing on the motion in May 2007. The transaction is expected to close by the end of June 2007.

“CPI is excited about the opportunity to leverage the company’s strong digital capabilities and infrastructure and proven project management skills to upgrade Pac’s studios with digital technology, improve convenience and flexibility and enhance the overall customer experience,” Renato Cataldo, CPI’s president and chief executive officer, stated. “Cpi is also pleased to be embarking on a relationship with Wal-Mart which the company looks forward to strengthening and expanding both domestically and internationally including in a new branded format. Finally, the company is pleased about the opportunities this deal brings to employees of both organizations. CPI has consciously become a more field-focused organization in recent years to better address the needs of the company’s Sears Portrait Studio associates. CPI aims to bring the same focus on the PCA field organization and will eagerly solicit their views and concerns. CPI believes the combination will benefit customers, employees and shareholders alike.”