Transcontinental, Quad/Graphics Swap Facilities
SUSSEX, WI—In the sport of professional baseball, July means—among other things—the celebrated trading deadline. By the 31st of the month, teams deal away or acquire players based upon whether they think their clubs will be competitive and perhaps have a shot at reaching the postseason. Some teams deal away players to cut costs, while others build for the future.
Well, a pair of printing companies beat the nonexistent deadline for trading away facilities. Two of the industry’s heavy hitters, Quad/Graphics Inc. and Montreal-based Transcontinental Inc., made a rare swap that is expected to benefit both organizations. Quad/Graphics will acquire Transcontinental’s Mexican operations and sell its Canadian operations to Transcontinental, with the exception of Quad/Graphics’ Vancouver, British Columbia, facility. As part of the deal, Quad also receives a portion of Transcontinental’s Canadian book printing business that is produced for U.S. export.
The transactions have been approved by the boards of directors of both companies and are subject to customary regulatory clearances, including under the Mexican Federal Law on Economic Competition and the Canadian Competition Act. The definitive agreement allows for the transactions to close independently of each other, but both are expected to close this fall. Essentially, these transactions represent an exchange of assets.
“This agreement is a win-win for Quad/Graphics and Transcontinental, and one that will create long-term value for both companies,” contends Joel Quadracci, chairman, president and CEO of Quad/Graphics. “We have long recognized the high growth potential in Mexico and South America. This acquisition supports our strategy to grow profitably in geographies and segments where we can be a market leader through a diverse product offering, and a superior and efficient operating platform. This acquisition expands on our existing presence in Mexico and is expected to provide solid synergy opportunities and position us to achieve our platform, earnings and market-leadership objectives.”