Posting this since i work for Quad/Graphics....
Two big printers expected to merge
The Wall Street Journal. 1/26/2010
By Jeffrey McCracken
Privately held Quad/Graphics Inc. of the U.S. is expected to acquire Canadian rival World Color Press Inc. for roughly $1.3 billion to $1.4 billion, said people familiar with the matter, in a deal that would create North America's second-largest commercial printer by sales, behind industry giant R.R. Donnelley & Sons Co.
Under the plan, these people said, shareholders of Toronto-listed World Color, which prints such magazines as Sports Illustrated and Rolling Stone, as well as the Crate & Barrel catalog and Yellow Book directory, would get a 40 percent stake in the newly combined company. The new company would then list on a U.S. stock exchange, they said, in effect bringing Quad/Graphics, whose clients include Newsweek, GQ and the L.L. Bean catalog, to the public market for the first time since its founding in 1971.
Quad/Graphics, based in Sussex, Wis., has 11,500 employees and 11 plants, most of them in the U.S. Its annual sales are around $2 billion. Montreal-based World Color, with a market capitalization of around $730 million, has about 18,000 employees and annual sales of around $3 billion, with about 30 percent of that coming from Canada and Latin America.
If investors value the new company at the same multiple to earnings as they do R.R. Donnelley, it would be worth roughly $5.25 billion. It could be worth more or less depending on market conditions at the time it is listed. The combined firm would have about $2 billion in debt.
The two companies hope to close the deal this summer, people familiar with the matter said. The companies estimate their combined 2010 earnings would be around $875 million, including cost savings.
Under the plan, the Quadracci family, which owns Quad/Graphics, would control the combined company after it went public through ownership of class B shares, these people said. A substantial block of shares would also be owned by Quad/Graphics's employee stock ownership plan.
Quad/Graphics Chief Executive Joel Quadracci, 41 years old, would be CEO of the combined company. Mr. Quadracci's father Harry launched Quad/Graphics nearly four decades ago with a rented printing press in a millwork factory outside Milwaukee. Aside from printing, Quad/Graphics is known for its on-site health clinics. Today, a subsidiary, QuadMed, manages such clinics for other Milwaukee-area companies, such as Miller Brewing.
World Color's CEO, Mark Angelson, 58, is expected to be named to the board of the new company and oversee the integration of the companies, people familiar with the matter said. He is a former CEO of R.R. Donnelley, which has annual sales of around $10 billion.
World Color was formerly known as Quebecor World, before that company filed for bankruptcy in January 2008. It emerged from bankruptcy court in July 2009. Its largest holders include distressed-debt investors, such as Avenue Capital Management , which owns about a 20 percent stake and Centerbridge Partners, with about 9 percent, according to recent securities filings.
J.P. Morgan Chase & Co., which advised Quad/Graphics on the deal, will commit to $1.2 billion in financing to refinance debt and pay off other obligations. Quad/Graphics was also advised by law firms Foley & Lardner LLP and Torys LLP. Morgan Stanley and law firms Sullivan & Cromwell LLP and Osler, Hoskin & Harcourt LLP advised World Color
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An old-fashioned merger at World Color
The Toronto Globe and Mail. 1/26/2010
The old-fashioned, cost-driven merger is back, as family-controlled Quad/Graphics consolidates the printing industry by taking out World Color Press, the company that emerged from Quebcor World’s trip through creditor protection.
There is one number of focus on in this deal: $225-million (U.S.) That’s the estimated cost savings the combined companies expect to realize over the next 24 months, as they knit together the largest privately-owner printer in North America with the No. 2 company in the sector.
Creating a company with market leadership, all kinds of potential synergies and $5.1-billion in revenues that in turn generate $647-million in EBITDA gets all kinds of support from the Street.
In a sign that banks were willing to lend on sensibly levered takeover, J.P. Morgan will put up $1.2-billion to redo the balance sheet of the combined companies. Total debt at the combined companies is estimated at $1.7-billion, or 2.6 times EBITDA. This merger will produce a conservatively financed printing company.
These are the sort of deals that tend to work: Companies with complimentary operations coming together, with rational financing and a clear sense of who is going to run the combined entity. And make no mistake, the Quad/Graphics team is in charge.
Joel Quadracci, the current boss at Quad/Graphics, will serve as Chairman, President and CEO of the expanded company. World Color head Mark Angelson, who has done a terrific job for creditors and shareholders, will move to a board role, running the committee that will keep an eye on integration.
Those social issues – investment banker jargon for who will do what at this massive printing company – speak to the other rational for this combination. Quad/Graphics, to again parrot the bankers, is getting liquidity.
Formerly-private Quad/Graphics will own 60 per cent of the new, publicly traded entity. That means the family and management team that build the company will now have a way to cash in on their efforts, or “monetize” as the financiers put it.
That process starts the moment this deal closes, as part of the merger agreement gives Quad/Graphics current owners the right to take a one-time $140-million cash distribution out of the combined companies.
J.P Morgan advised Quad/Graphics on this transaction, along with law firms Torys and Foley & Lardner.
Across the table, Morgan Stanley worked with World Colour, with legal counsel for Osler Hoskin & Harcourt and Sullivan & Cromwell.
Two big printers expected to merge
The Wall Street Journal. 1/26/2010
By Jeffrey McCracken
Privately held Quad/Graphics Inc. of the U.S. is expected to acquire Canadian rival World Color Press Inc. for roughly $1.3 billion to $1.4 billion, said people familiar with the matter, in a deal that would create North America's second-largest commercial printer by sales, behind industry giant R.R. Donnelley & Sons Co.
Under the plan, these people said, shareholders of Toronto-listed World Color, which prints such magazines as Sports Illustrated and Rolling Stone, as well as the Crate & Barrel catalog and Yellow Book directory, would get a 40 percent stake in the newly combined company. The new company would then list on a U.S. stock exchange, they said, in effect bringing Quad/Graphics, whose clients include Newsweek, GQ and the L.L. Bean catalog, to the public market for the first time since its founding in 1971.
Quad/Graphics, based in Sussex, Wis., has 11,500 employees and 11 plants, most of them in the U.S. Its annual sales are around $2 billion. Montreal-based World Color, with a market capitalization of around $730 million, has about 18,000 employees and annual sales of around $3 billion, with about 30 percent of that coming from Canada and Latin America.
If investors value the new company at the same multiple to earnings as they do R.R. Donnelley, it would be worth roughly $5.25 billion. It could be worth more or less depending on market conditions at the time it is listed. The combined firm would have about $2 billion in debt.
The two companies hope to close the deal this summer, people familiar with the matter said. The companies estimate their combined 2010 earnings would be around $875 million, including cost savings.
Under the plan, the Quadracci family, which owns Quad/Graphics, would control the combined company after it went public through ownership of class B shares, these people said. A substantial block of shares would also be owned by Quad/Graphics's employee stock ownership plan.
Quad/Graphics Chief Executive Joel Quadracci, 41 years old, would be CEO of the combined company. Mr. Quadracci's father Harry launched Quad/Graphics nearly four decades ago with a rented printing press in a millwork factory outside Milwaukee. Aside from printing, Quad/Graphics is known for its on-site health clinics. Today, a subsidiary, QuadMed, manages such clinics for other Milwaukee-area companies, such as Miller Brewing.
World Color's CEO, Mark Angelson, 58, is expected to be named to the board of the new company and oversee the integration of the companies, people familiar with the matter said. He is a former CEO of R.R. Donnelley, which has annual sales of around $10 billion.
World Color was formerly known as Quebecor World, before that company filed for bankruptcy in January 2008. It emerged from bankruptcy court in July 2009. Its largest holders include distressed-debt investors, such as Avenue Capital Management , which owns about a 20 percent stake and Centerbridge Partners, with about 9 percent, according to recent securities filings.
J.P. Morgan Chase & Co., which advised Quad/Graphics on the deal, will commit to $1.2 billion in financing to refinance debt and pay off other obligations. Quad/Graphics was also advised by law firms Foley & Lardner LLP and Torys LLP. Morgan Stanley and law firms Sullivan & Cromwell LLP and Osler, Hoskin & Harcourt LLP advised World Color
______________________________________________________________________________________
An old-fashioned merger at World Color
The Toronto Globe and Mail. 1/26/2010
The old-fashioned, cost-driven merger is back, as family-controlled Quad/Graphics consolidates the printing industry by taking out World Color Press, the company that emerged from Quebcor World’s trip through creditor protection.
There is one number of focus on in this deal: $225-million (U.S.) That’s the estimated cost savings the combined companies expect to realize over the next 24 months, as they knit together the largest privately-owner printer in North America with the No. 2 company in the sector.
Creating a company with market leadership, all kinds of potential synergies and $5.1-billion in revenues that in turn generate $647-million in EBITDA gets all kinds of support from the Street.
In a sign that banks were willing to lend on sensibly levered takeover, J.P. Morgan will put up $1.2-billion to redo the balance sheet of the combined companies. Total debt at the combined companies is estimated at $1.7-billion, or 2.6 times EBITDA. This merger will produce a conservatively financed printing company.
These are the sort of deals that tend to work: Companies with complimentary operations coming together, with rational financing and a clear sense of who is going to run the combined entity. And make no mistake, the Quad/Graphics team is in charge.
Joel Quadracci, the current boss at Quad/Graphics, will serve as Chairman, President and CEO of the expanded company. World Color head Mark Angelson, who has done a terrific job for creditors and shareholders, will move to a board role, running the committee that will keep an eye on integration.
Those social issues – investment banker jargon for who will do what at this massive printing company – speak to the other rational for this combination. Quad/Graphics, to again parrot the bankers, is getting liquidity.
Formerly-private Quad/Graphics will own 60 per cent of the new, publicly traded entity. That means the family and management team that build the company will now have a way to cash in on their efforts, or “monetize” as the financiers put it.
That process starts the moment this deal closes, as part of the merger agreement gives Quad/Graphics current owners the right to take a one-time $140-million cash distribution out of the combined companies.
J.P Morgan advised Quad/Graphics on this transaction, along with law firms Torys and Foley & Lardner.
Across the table, Morgan Stanley worked with World Colour, with legal counsel for Osler Hoskin & Harcourt and Sullivan & Cromwell.
