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Quad/Graphics to Acquire Worldcolor

January 26, 2010
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SUSSEX, WI/MONTREAL—January 26, 2010—Quad/Graphics, Inc., the largest privately held printer in the U.S., and World Color Press Inc. (TSX: WC, WC.U) (“Worldcolor”), the second largest provider of print, digital and related services in the Americas, today announced that their boards of directors unanimously have approved a definitive arrangement agreement whereby Quad/Graphics will acquire Worldcolor, enhancing Quad/Graphics’ position as a leader in the printing industry with increased efficiencies, greater geographic reach and broader product and service scope.

The expanded Quad/Graphics will have nearly 30,000 employees serving customers in the U.S., Canada, Latin America and Europe. Worldcolor and Quad/Graphics had aggregate unaudited revenues for the 12-month period ended September 30, 2009 of U.S. $5.1 billion and aggregate unaudited adjusted EBITDA of U.S. $647 million. Worldcolor’s and Quad/Graphics’ unaudited adjusted EBITDA margins for the same period were 9.7% and 17.6%, respectively.

The transaction is expected to close approximately in the summer of 2010 and be accretive to the earnings of the combined enterprise. Quad/Graphics’ management estimates that the combination will generate approximately U.S. $225 million in pre-tax net annualized synergies within 24 months.

Concurrent with the closing of the transaction, Quad/Graphics intends to become a publicly traded company. Quad/Graphics expects to register its Class A Common shares with the U.S. Securities and Exchange Commission (SEC) and proceed with a listing on a leading U.S. exchange. Under terms of the agreement, Worldcolor shareholders will receive at closing approximately 40 percent of the outstanding shares of Quad/Graphics and Quad/Graphics’ shareholders will hold approximately 60 percent of the shares.

The acquisition will enhance Quad/Graphics position as a commercial printing leader in North America serving the Magazine, Catalog, Retail Insert, Book, Directory, and Direct Mail product segments and enhance Quad/Graphics’ standing as one of the leading commercial printers in the world. The expanded Quad/Graphics will be better positioned to succeed in the dynamic, highly fragmented, and competitive printing industry as it will offer clients a more comprehensive range of services, including a broader variety of product types and revenue generating solutions; an enhanced manufacturing platform that will make available Quad/Graphics’ industry leading technology and automation to the combined platform; an expanded geographic footprint and customer service presence; and new opportunities to realize distribution efficiencies through improved speed-to-market and product integrity for USPS delivered products and volume driven postage savings programs, such as co-mailing, all backed by experienced and proven leadership.
 

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