RR Donnelley to Acquire Consolidated Graphics for $620M
CHICAGO and HOUSTON—October 24, 2013—R. R. Donnelley & Sons Company (RRD) and Consolidated Graphics (CGX) jointly announced today that they have signed a definitive agreement by which RR Donnelley will acquire Consolidated Graphics, 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 terms of the transaction, Consolidated Graphics 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 October 23rd. This consideration represents a transaction value of approximately $620 million, plus the assumption of Consolidated Graphics' net debt.
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 first quarter of 2014. The completion of the transaction is subject to customary closing conditions, including regulatory approval and approval of Consolidated Graphics' shareholders. Simultaneously with signing the definitive merger agreement, Consolidated Graphics' Chairman and CEO, Joe R. 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 currently represent approximately 16.5 percent of Consolidated Graphics' outstanding shares.
"Consolidated Graphics is an exceptional fit with RR Donnelley and we are delighted to welcome them to our organization," said Thomas J. Quinlan III, RR Donnelley's president and CEO. "This strategic combination will complement the RR Donnelley platform and further enhance our ability to provide integrated communications solutions for our valued clients across all industry verticals."
"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."
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 Consolidated Graphics
Consolidated Graphics, Inc. (NYSE:CGX), headquartered in Houston, Texas, is one of North America's leading general commercial printing companies. With 70 printing businesses strategically located across 26 states, Toronto, Prague, and Gero, Japan, CGX offers a broad geographic footprint, leading-edge capabilities, and high levels of convenience, efficiency and service. With locations in or near virtually every major U.S. population center, CGX provides the service and responsiveness of a local printer enhanced by the economic, geographic and technological advantages of a large national organization.
Source: RR Donnelley and Consolidated Graphics.