Quebecor World -- Back on Top of Its WorldNovember 2008 By Erik Cagle
Tales of faltering banks and lending institutions burned severely by bad debt (and abandoned by golden-parachuted executives), and mortgage lenders who peddled adjustable rate mortgages to the un-affording masses have become all too familiar and will some day be etched into history books.
How quickly and successfully the economic landscape improves is dependent upon any number of variables. Certainly, the printing industry hasn’t been immune to the financial discord of 2008. But, back when the talk was of a possible recession—before the ramifications of the aforementioned issues came to light and the world collectively panicked in early October—there lumbered a great and proud printing giant, hemorrhaging stock value, unable to shed European assets that had become a liability, and in grave danger of becoming the biggest North American printer to perish.
Now, as retail businesses gulp at the prospect of a U.S. consumer public more concerned with squirreling away funds than spending lavishly in anticipation of the holiday season, out of the turmoil steps Quebecor World, smoothing over its jacket, straightening its tie, ready to step out for the evening.
Financial turmoil? Been there, done that, and now in a much different place. The Montreal-based magazine, book, catalog, direct mail, directory, magazine and retail insert printer has experienced a roller coaster of fortunes in 2008—bankruptcy, a new leader, new accounts, lost accounts, done deals gone sour, financing misfires and triumphs, shuttered facilities, lost jobs, and now...a new hope.
The pride of Montreal, which posted sales of approximately $5.7 billion in 2007—a loss of about $300 million from the previous campaign—is just about ready to retake its place among the ranks of fiscally viable printing companies with strong balance sheets. As of mid-October, the company was to start discussing terms of a bankruptcy exit plan with creditors (including exit financing), which would be followed by entering into a term sheet with its biggest stake holders.
Once the term sheet is secured, notes Jacques Mallette, president and CEO of Quebecor World, it generally takes three to four months to exit bankruptcy protection.
Barring any bumps in the road—mindful that the company has to deal with reorganizational laws in two countries—Mallette anticipates term sheet approval by the conclusion of 2008. The end is near, and so is the beginning. A new name, fresh logo, bold identity and a refocused mission statement will usher in a new era and a possible return to greatness for North America’s second largest printing conglomerate. Along with organic growth, the company that expanded through acquisition will one day soon be active on the M&A landscape and perhaps add to its stable of 100 facilities and 24,000 employees.