MONTREAL - World Color Press Inc. (TSX:WC), the Montreal-based printing giant formerly known as Quebecor World, has agreed to be taken over by Quad/Graphics Inc. in order to create a combined company with 30,000 employees.
Quad/Graphics Inc. is currently the largest privately held printer in the United States but plans to go public in connection with the World Color takeover.
World Color Press is the publicly traded company that was formed after the former Quebecor printing business was restructured under court protection from its creditors.
An estimated value of the overall transaction wasn't released by the companies. Each share of World Color will be converted into a number of class A common shares of Quad/Graphics at a ratio that has yet to be determined.
World Color shareholders will receive shares of Quad/Graphics and end up with 40 per cent ownership of the combined business as well as two seats on its board of directors.
As of Sept. 30, the two companies had a combined debt of about US$1.7 billion.
The companies estimate the combination will generate about US$225 million in pre-tax synergies, a term that usually refers to a combination of cost cutting and improved growth.
The companies' statement Tuesday didn't provide details of what will happen to their current employees or locations.
"By combining the strengths of both companies, we will enhance our leadership position in the printing industry," said Joel Quadracci, who is chairman, president and CEO of Quad/Graphics.
"This transaction presents compelling opportunities for the achievement of synergies and other efficiencies," said Mark Angelson, chairman and chief executive officer of World Color, who will join the Quad/Graphics board of directors.
"I have the highest regard for Joel and his management team, whom I consider to be among the best and brightest executives anywhere. They have built a company known for having the industry's best technology, automation and robotics, and world-class customer service. Quad/Graphics will make a fine, stable home for Worldcolor managers and employees."
The companies said they have arranged US$1.2 billion in financing from JPMorgan Chase and U.S. Bank.
The Harry V. Quadracci family will control the company through their holdings of multiple-vote B shares.
Quad/Graphics to buy former Quebecor printing business
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Published on
January 26, 2010
- Published on February 24, 2010
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The Canadian Press ~ The News
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