Quad/Graphics to buy rival World Color
Quad/Graphics, Inc., a printer of catalogs, magazines and other commercial products agreed to buy Canadian firm World Color Press Inc. , a provider of print, digital and related services, the companies said in a joint statement. The transaction is expected to close around 2010 summer. Quad/Graphics expects to be listed on "leading" U.S. exchange.
The deal will create North America's second-largest commercial printer by sales, behind industry leader R.R. Donnelley & Sons Co.
"This transaction allows us to expand our geographic scope by entering the Canadian marketplace and certain Latin American markets where we currently do not have a presence," said Quad/Graphics' Chief Executive Joel Quadracci, in a statement.
The two companies did not announce a definitive deal value at this time, but the transaction is expected to be worth between $1.3 billion and $1.4 billion.
Montreal, Quebec-based World Color, formerly Quebecor World, was founded over a century ago and prints magazines such as Sports Illustrated and Rolling Stone. It has operations in the United States, Canada, Argentina, Brazil, Chile, Colombia, Mexico and Peru.
Privately held Quad/Graphics said concurrent with the closing of the deal, it intends to become a publicly traded company.
Once the deal is complete, Quad/Graphics' shareholders will hold about 60 percent of the combined entity's shares, while Worldcolor shareholders will own the remainder of the new company.
The combined entity is expected to generate annual revenues of over $5 billion. Quad/Graphics' estimates that the combined company will generate about $225 million in annualized savings within 24 months of closing.
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