Quad/Graphics to Acquire Courier Corp. for $260M as Part of Strategy to Transform Book Platform

SUSSEX, WI and NORTH CHELMSFORD, MA—January 16, 2015—Quad/Graphics Inc. and Courier Corp. jointly announced a definitive agreement by which Quad/Graphics will acquire Courier, a leading innovator in book manufacturing, publishing and content management. The acquisition accelerates Quad/Graphics’ three-year strategy to transform its book platform, which the company announced earlier this week.

Under terms of the agreement, Quad/Graphics will acquire Courier in a transaction valued at approximately $260 million, including approximately $25 million in net debt and capital leases as of Dec. 31, 2014. Quad/Graphics will pay Courier shareholders the equivalent of a total purchase price of $20.50 per share, consisting of cash and shares of Quad/Graphics Class A common stock. Each Courier shareholder will have the right to elect to receive cash or Quad/Graphics common stock, subject to proration in the event that shareholders elect to receive more than 54 percent cash or more than 46 percent stock. Quad/Graphics will pay an aggregate amount consisting of approximately $129 million in cash and approximately 4.8 million shares.

The transaction has been approved by both companies’ boards of directors and is subject to customary closing conditions, including regulatory approval and approval by Courier’s shareholders. Quad/Graphics expects the acquisition to close by mid-year, be accretive to earnings in 2016, and that the purchase price multiple will be less than five times Adjusted EBITDA after taking into account anticipated synergies. Upon closing of the transaction, James F. Conway III will join Quad/Graphics as president of the Book Division.

"We are excited about the opportunities ahead with Courier as part of our company, and the value it creates for both our companies’ clients and shareholders," said Joel Quadracci, Quad/Graphics chairman, president and CEO. "Courier has a legacy of superior quality and exceptional customer service, and is a well-known innovator in every aspect of book production, from content management to printing, binding, distribution and integration with electronic media."

Courier was an early adopter of the digital print technology that is rapidly changing the dynamics of the book industry, Quadracci explained. "Using digital technology, Courier pioneered the development of customization solutions that now bring class-specific versions of academic textbooks to millions of students each year. The company has continually reinvested in its platform, and with our previously announced investment in 20-plus digital presses and integrated systems, together we will accelerate a broad industry transition to a print-on-demand, zero-inventory model."

Said James F. Conway III, Courier’s chairman, president and CEO: "After a careful and thorough evaluation process, the Courier board has determined that the transaction with Quad/Graphics maximizes value for our shareholders. The board strongly believes that this transaction achieves that result, providing a substantial premium for our shareholders."

Conway continued: "I am delighted to bring Courier together with another company that shares our values, offers complementary capabilities and opens up a world of additional opportunities. We are confident that the combination of our two companies will create the most opportunities for customers and employees well into the future. Like Courier, Quad/Graphics represents the very best in technology and service for the 21st-century marketplace. The addition of Courier’s four-color offset presses, digital inkjet presses, end-to-end process management and integrated software solutions further enhances Quad/Graphics’ efforts to transform the book industry to the benefit of publishers and readers everywhere."

Quadracci concluded, "We look forward to welcoming Courier’s clients and employees to Quad and redefining the book supply chain for the benefit of publishers everywhere."

About Quad/Graphics
Quad/Graphics, a leading global printer, is redefining print in today’s multichannel media world by helping marketers and publishers capitalize on print’s ability to complement and connect with other media channels. With consultative ideas, worldwide capabilities, leading-edge technology and single-source simplicity, Quad/Graphics has the resources and knowledge to help its clients maximize the revenue they derive from their marketing spend through channel integration, and minimize their total cost of print production and distribution through a fully integrated national distribution network. The company provides a diverse range of print solutions, media solutions and logistics services from multiple locations throughout North America, Latin America and Europe.

About Courier Corp.
Courier Corp. is America’s second largest book manufacturer and a leader in content management and customization in new and traditional media. It also publishes books under two brands offering award-winning content and thousands of titles. Founded in 1824, Courier is headquartered in North Chelmsford, MA.

Source: Quad/Graphics.