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Donnelley Shells Out $620M For Consolidated Graphics

November 2013
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CHICAGO—RR Donnelley and Houston-based Consolidated Graphics (CGX) jointly signed a definitive agreement on Oct. 24 by which RR Donnelley will acquire CGX, a provider of digital and commercial printing, fulfillment services, print management and proprietary Internet-based technology solutions. The agreement has been unanimously approved by each company’s board of directors.

Under the deal, CGX shareholders will receive a combination of $34.44 in cash and a fixed exchange ratio of 1.651 RR Donnelley shares for each outstanding share of Consolidated Graphics they own or $62 per share based on RR Donnelley’s closing share price on Oct. 23. This represents a transaction value of approximately $620 million, plus the assumption of CGX’s net debt.

The acquisition is expected to be deleveraging and accretive to RR Donnelley’s non-GAAP earnings per diluted share within 12 months after the Q1 2014 closing. The deal is subject to customary closing conditions, including regulatory and CGX shareholder approval. As part of the deal, Consolidated Graphics Chairman and CEO Joe Davis entered into a voting agreement, under which he agreed to vote his shares in favor of the approval of the merger agreement. Davis’ shares represent approximately 16.5 percent of CGX’s outstanding shares.       

“Consolidated Graphics’ success is due to our outstanding employees and their ability to provide the service and responsiveness of a local printing company while offering customers the flexible solutions and competitive pricing available from our wide network,” stated Davis. “Our customers will benefit significantly from RR Donnelley’s broad range of printing capabilities and our combined geographic footprint.

“RR Donnelley’s customers will benefit from the planned adoption of Consolidated Graphics’ local service model for all of its commercial printing group.”

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