Transcontinental, Quad/Graphics Swap FacilitiesJuly 15, 2011
Given the synergy opportunities from integrating operations in Mexico, as well as the higher, more profitable growth the company anticipates there, Quad/Graphics expects this transaction will create positive incremental adjusted EBITDA within 12 to 24 months following the close of the transaction.
In the transaction, Transcontinental will also transfer to Quad/Graphics its black-and-white book printing business destined for U.S. export, which represents approximately US$25 million in sales.
As part of the Canadian transaction, Transcontinental will assume retirement pension and post-retirement obligations approximating US$75 million and acquire seven Quad/Graphics facilities (consisting of six printing plants and a premedia operation) that employ approximately 1,500 people and are forecasted to generate approximately US$310 million of revenues in fiscal year 2011. The facilities are located in Aurora, Concord and Markham (Toronto), Ontario; LaSalle and Montreal, Quebec; Edmonton, Alberta; and Dartmouth, Nova Scotia.
“The acquisition of the Canadian assets of Quad/Graphics is in line with our strategy to strengthen our more traditional print assets in Canada and is key to maintain a solid business going forward, given the competitive and industry dynamics,” according to François Olivier, president and CEO of Transcontinental. “It will allow us to leverage the over $700 million in investments we made to our printing platform over the last several years, it will generate significant synergies and it will better equip us to face the new challenges in our industry.”