Open Enrollment | Subscribe to Printing Impressions HERE
Connect
Follow us on
Advertisement
 

Moore/Wallace Merger Called A "Win-Win"

March 2003
STAMFORD,CT—When Moore Corp. CEO Mark Angelson picked up the phone in August of 2002 he knew he had a winner. He informed a Wallace Computer Services director at the other end of the phone, "I'm sitting here and looking at a set of numbers I find so compelling that I think we need to talk about this."

Talk they did.

The resulting conversations led to a $1.3 billion deal that will merge the two companies into Moore-Wallace. "When we arrived at Moore in 2000, it became clear that a combination with Wallace was compelling, given the right circumstances," explains Angelson, who will head the combined company. Angelson became CEO at Moore in December of 2002 after Robert Burton—who turned around the struggling company and tripled its stock price over the past two years—stepped down.

Combining the companies had been a strategy that Moore had previously attempted in 1995. Moore launched a hostile bid that Wallace fought for more than a year before Moore eventually dropped its bid for the company

Friendly Merger

The recent merger announcement was characterized as friendly, with both boards of directors unanimously approving the merger. Under the terms of the agreement, Moore will pay approximately $606 million in cash, approximately $470 million in Moore's common shares and will assume $210 million in debt.

Wallace shareholders will be given the opportunity to elect to receive either cash or shares. To complete the transaction, Moore will issue approximately $44.2 million in common shares to Wallace shareholders, who, following the merger, will own approximately 28 percent of the combined company.

The merger is not expected to raise any anti-trust issues, company executives say. There is a ruling from a Delaware court that stems from the previous hostile takeover attempt. The court ruled then that a merger of the companies would not pose an anti-trust issue.

"We've been told that we are on solid ground," remarks Angelson.

When the merger is completed, Moore-Wallace will have approximately $3.6 billion in annual revenues and more than 18,500 employees worldwide. However, management has not ruled out any layoffs. "I can't say that some people may not lose their jobs," admits Angelson. "We see this as an opportunity to take the best from both companies," he adds.

At the time of the merger, three of Wallace's directors will be offered positions on the combined company's board.

The new company expects to generate cost savings of at least $50 million. Headquartered in Lisle, IL, Wallace maintains 45 manufacturing facilities; nine distribution and warehousing hubs; and 150 sales locations. Moore has 45 production facilities, 14 print fulfillment centers, 23 warehouse hubs and 220 sales locations throughout the world.
 

COMMENTS

Click here to leave a comment...
Comment *
Most Recent Comments: