Courier Corp. Terminates Quad/Graphics Agreement, Will Be Acquired by RR Donnelley Instead

CHICAGO and NORTH CHELMSFORD, MA—February 5, 2015—RR Donnelley & Sons (RRD) and Courier Corp. jointly announced today that they have signed a definitive agreement by which RR Donnelley will acquire Courier Corp., a leader in digital printing, publishing and content management in the United States specializing in educational, religious and trade books. The agreement has been approved by each company’s Board of Directors.

Courier Corp. also announced today that it has terminated its previously announced merger agreement with Quad/Graphics Inc. As previously announced, on Jan. 16, 2015, Courier entered into a definitive merger agreement with Quad/Graphics under which Quad/Graphics would acquire Courier in a cash and stock transaction with a total purchase price of $20.50 per share (valued at $260 million).

On Jan. 27, 2015, Courier announced that it had received a non-binding, unsolicited proposal from RR Donnelley to acquire Courier for $23.00 per share in cash and RR Donnelley common stock. On Jan. 28, 2015, Courier announced that its Board of Directors had determined that the RR Donnelley proposal was reasonably likely to result in a "Superior Proposal" as defined in the Quad/Graphics merger agreement.

Following discussions with RR Donnelley and consistent with its fiduciary duties, Courier’s Board of Directors, in consultation with its independent legal and financial advisors, carefully reviewed and considered the RR Donnelley proposal. In accordance with the Quad/Graphics merger agreement, Courier provided Quad/Graphics with the opportunity to match the RR Donnelley proposal. Quad/Graphics declined to make any new proposal and the Courier Board unanimously determined that the RR Donnelley proposal constituted a "Superior Proposal" as defined under the Quad/Graphics merger agreement.

In accordance with the Quad/Graphics merger agreement, simultaneous with termination of the agreement, Courier paid Quad/Graphics a $10 million termination fee. Under the terms of the RR Donnelley merger agreement, Courier will be reimbursed by RR Donnelley for the entire $10 million fee payment.

James F. Conway III, Courier’s chairman, president and CEO, stated, "After a careful evaluation process, the Courier Board determined that the RR Donnelley transaction provides superior value to Courier shareholders and important benefits to our customers and employees."

Blackstone Advisory Partners L.P. is serving as exclusive financial advisor to Courier Corp., and Goodwin Procter LLP is serving as legal counsel.

Under the terms of the transaction, Courier’s shareholders will have the option to elect to receive either $23.00 in cash or 1.3756 RR Donnelley common shares for each outstanding share of Courier they own. Such elections are subject to pro ration so that a total of 8.0 million shares of RR Donnelley common stock will be issued in the merger. Based on the closing trading price of RR Donnelley’s common stock on the NASDAQ on Feb. 4, 2015, the merger consideration represents a mix of approximately 49 percent cash and 51 percent stock, and a total transaction value of approximately $261 million, plus the assumption of Courier’s net debt and payout of outstanding equity awards.

The acquisition is expected to be both deleveraging and accretive to RR Donnelley's non-GAAP earnings per diluted share within 12 months following the closing of the transaction, which is expected to occur in the second half of 2015. The completion of the transaction is subject to customary closing conditions, including regulatory approval and approval of Courier’s shareholders.

"This combination represents the next chapter in two long-running success stories woven together by a similar set of core values and operational excellence," said Thomas J. Quinlan III, RR Donnelley's president and CEO. "Our two organizations have a longstanding history of offering industry-leading solutions to our customers. We look forward to working with Jim Conway and his team in continuing that tradition."

Conway also noted, "By adding our digital printing and content management capabilities to RR Donnelley’s current business, we will be even better positioned to meet our collective customers’ needs. Our customers can also continue to count on the same level of exceptional service, and our employees will benefit from greater opportunities for professional growth and development. We are excited by the opportunities created by this combination and look forward to working with RR Donnelley to fulfill them."

About RR Donnelley
RR Donnelley (NASDAQ: RRD) is a global provider of integrated communications. The company works collaboratively with more than 60,000 customers worldwide to develop custom communications solutions that reduce costs, drive top-line growth, enhance ROI and increase compliance. Drawing on a range of proprietary and commercially available digital and conventional technologies deployed across four continents, the company employs a suite of leading Internet-based capabilities and other resources to provide premedia, printing, logistics and business process outsourcing services to clients in virtually every private and public sector.

About Courier
Courier Corp. is one of America’s major book manufacturers as well as 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: Courier Corp.