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Quad/Graphics and Transcontinental Swap Assets in Canada and Mexico

July 13, 2011
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“The print markets in general have suffered from overcapacity and more intense competitive pressures in certain niches in recent years, with the proliferation of digital and Web communication platforms, technological advances in new printing presses as well as the entry of U.S. players in the Canadian marketplace. These transactions will permit us to improve our capacity utilization rate and better equip us to face these new challenges,” continued Olivier. "We thank all the employees in our Mexican operations for their dedication and outstanding contribution to the company's success.”

“By acquiring Transcontinental’s Mexican assets, we will become the leading producer of magazines, retail inserts and catalogs in Mexico,” noted Tony Scaringi, newly named president and general manager of Latin America. “We will roll out Quad/Graphics’ long-standing best practices in Lean Enterprise, safety and technical education to the expanded platform, further enhancing our position as the sustainable, value-added print producer for all of Latin America.”

Quadracci added, “Through this transaction, we will be redeploying our capital to the emerging market in Mexico, which has a growing middle class and a population more than three times the size of Canada. To drive growth in Canada would have required a substantial capital investment.

“Canada is a lower growth, highly competitive print market with excess capacity. That market reality, combined with declining revenues and earnings, and along with the underfunded pension obligations of the Canadian business, makes Canada a less-compelling long-term value creation opportunity for us compared to Mexico.”

About Quad/Graphics
Quad/Graphics (NYSE: QUAD) is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 24,000 full-time equivalent employees working from more than 60 print-production facilities as well as other support locations throughout the United States, Canada, Latin America and Europe. As a printing industry innovator, Quad/Graphics (www.QG.com) is redefining the power of print in today’s multimedia world by helping its clients use print as the foundation of multichannel communications strategies to drive their top-line revenues.

About Transcontinental
Transcontinental creates marketing products and services that allow businesses to attract, reach and retain their target customers. The Corporation is the largest printer in Canada and Mexico, and fourth-largest in North America. As the leading publisher of consumer magazines and French-language educational resources, and of community newspapers in Quebec and the Atlantic provinces, it is also one of Canada's top media groups. Thanks to a wide digital network of more than 300 websites, the company reaches over 10 million unique visitors per month in Canada. Transcontinental also offers interactive marketing products and services that use new communication platforms supported by marketing strategy and planning services, database analytics, premedia, e-flyers, e-mail marketing, custom communications and mobile solutions.

Transcontinental (TSX: TCL.A, TCL.B, TCL.PR.D) has 10,500 employees in Canada, the United States and Mexico, and reported revenues of C$2.1 billion in 2010. For more information about the Corporation, please visit www.transcontinental.com.

Source: Joint Announcement.
 

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