CATALOG & MAGAZINE PRINTING OUTLOOK — TURNING THE PAGE

Additional Services

RR Donnelley has invested significant capital and resources in co-mailing, and there is an associated resultant revenue stream. Co- mailing has not been set up as a separate profit center—it is seen as a natural extension of printing, binding and distribution services.

In 2006, RR Donnelley acquired OfficeTiger, which provides integrated onsite and offshore business process outsourcing (BPO) services. OfficeTiger’s services include financial analysis and reporting, desktop publishing, creative services, word processing, credit analysis, claims processing, litigation support, market research, database services, managing creative services for output and more.

“In addition, internally, RR Donnelley has integrated our direct mail and catalog/retail organizations into the same business unit,” Zengo explains. “This enables RR Donnelley to bring more comprehensive and synergistic capabilities and solutions to our catalog, retail and direct mail customers. It also allows us to better align with our customers’ multi-channel needs.”

Then, in one of the biggest surprises of the year, RR Donnelley announced it will acquire rival Banta Corp. in an all-cash deal valued at approximately $1.3 billion, which is expected to close in the first quarter of 2007.

The combination will enable RR Donnelley to expand the range of products and services it offers customers, while at the same time enhancing its services to the magazine, catalog, book and direct marketing segments. Banta—with operations in the United States, Europe and Asia—will enhance RR Donnelley’s geographic footprint and create opportunities for additional scale in locations where it is already present.

“Our publishing, catalog and direct marketing customers, in particular, will benefit from combined resources that will allow us to craft even more innovative and responsive solutions,” contends John Paloian, RR Donnelley group president, publishing and retail services. “From digital prepress capabilities through sophisticated logistics, our enhanced flexibility will allow us to address our customers’ needs more quickly for cost-effective and compelling communications.”

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