Quad/Graphics and Transcontinental Swap Assets in Canada and Mexico

SUSSEX, WI—July 13, 2011—Quad/Graphics Inc.and Transcontinental Inc. announced that they have entered into a definitive agreement whereby Quad/Graphics will acquire Transcontinental’s Mexican operations and sell its Canadian operations to Transcontinental (with the exception of Quad/Graphics’ Vancouver, B.C., facility). Further, Quad/Graphics will receive a portion of Transcontinental’s Canadian book printing business that is produced for U.S. export.

Transcontinental currently employs approximately 900 people across its three facilities in Azcapotzalco, Toluca and Xochimilco, Mexico, and forecasts to generate approximately $70 million in revenues for fiscal year 2011. It will be acquiring seven of Quad/Graphics’ facilities across Canada, including six printing plants and one premedia facility. These operations employ 1,500 people and are forecasted to generate approximately $310 million in fiscal 2011 revenues. The facilities are located in Aurora, Concord and Markham (Toronto), Ontario; LaSalle and Montreal, Québec; Edmonton, Alberta; and Dartmouth, Nova Scotia.

Also as part of the transaction, Transcontinental will transfer to Quad/Graphics its black-and-white book printing business destined for U.S. export, which represents approximately $25 million in revenues.

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 in the fall of 2011. 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,” said 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,” Quadracci explained.

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