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Burton Makes Bid to Take Cenveo Helm

April 2005
GREENWICH, CT--Robert Burton has informed Printing Impressions magazine that he has filed a Schedule 13D with the Securities and Exchange Commission (SEC) to report that his Burton Capital Management (BCM) now owns approximately 10 percent (9.6) of Cenveo's outstanding shares.

Burton also seeks to become the next chairman and CEO of Cenveo, with BCM having the right to choose two board members. Should the company not negotiate terms with Burton, he could wage a proxy battle.

The move comes roughly two months after Burton yielded to Eastman Kodak in his bid to take control of Creo.

In a letter addressed to Cenveo shareholders dated April 7, Burton expressed his displeasure in the company's inability to effectively cut costs and create shareholder value. He recounted his earlier proposals to acquire the company, including a $7 per share offer last July.

BCM's proposal valued the company at 8.5 times Cenveo's trailing 12-month EBITDA, representing a premium of approximately 155 percent over the average of its closing prices for July 2004. Burton wrote that he was told the company was "only willing to entertain discussions with us if we would indicate a valuation rate in the 'high-single digits.'" He felt that neither historical or projected earnings, business properties and portfolio, or precedented transaction comparables justified the pricetag, and talks halted.

Burton wrote that after learning of the resignation of former Chairman, President and CEO Paul Rielly, he contacted Cenveo and offered to invest up to $100 million in newly issued securities of Cenveo that would be priced based on the then-current market price of approximately $3 per common share. Burton also stated his desire to assume executive direction of the company, and expressed his dismay over the company's unresponsiveness to BCM's inquiries.

Undaunted, Burton is pressing the company to come to the negotiating table. "We believe that if the company's cost structure were brought in line with those of its publicly-traded peers, substantial value will be created for its shareholders with the stock potentially worth at least $10 to $12 a share," he wrote.

As of Friday morning, Cenveo was in the process of preparing a statement.
 

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