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Senior Editor, Printing Impressions Magazine

Printers’ Pulse

By Erik Cagle

About Erik

Erik Cagle is senior editor for Printing Impressions magazine. He has reported on the graphics arts industry for 11 years.


Quadracci, Angelson Share Their Accounts of Mega Deal

Big news today in terms of the Quad/Graphics acquisition of Worldcolor, with ramifications that will become more clear as we progress.

• How many people will lose their jobs, and which facilities will be shuttered during the integration process?

• What impact will this move have on the magazine, catalog, retail insert, etc. markets?

• How PO'd is RR Donnelley right now?

Many unanswered questions remain, so stay tuned. What we do know is that what started out as lunch last August between the chief execs of Quad and Worldcolor set the stage for Tuesday's shocker.

Here are some of the remarks made by Mark Angelson, Worldcolor CEO, and Joel Quadracci, chairman, president and CEO of Quad/Graphics, during Tuesday's investor call.

Mark Angelson, CEO, Worldcolor:

We're here to discuss a transaction of truly historic significance in our industry. It is the most compelling transaction with which I have been associated and is the occasion to pass the torch of leadership to a new generation in our industry. The Worldcolor team and I have come to know Joel, his management team and Quad/Graphics very well over the recent months. I am literally delighted at the prospect of Worldcolor having this unique opportunity to become part of the most nimble, the most technologically advanced, the most efficient and the most well-run business in commercial printing. I consider Joel and his leadership team to be among the best and brightest executives anywhere, and they have built Quad/Graphics into a company with the industry's top technology, top automation, robotics and customer service.

This transaction will allow our customers to benefit from working with a printer that is highly attuned and best able to be responsive to their evolving needs in today's multi-channel media world. This transaction will allow most of our employees to work for a more efficient company, better positioned to win in a dynamic and competitive industry. This combination will allow our shareholders to have ownership in a company with industry leading margins and growth prospects while benefitting from the enhanced liquidity that we expect will result from this transaction and concurrent public listing by Quad/Graphics.

Joel Quadracci, chairman, CEO and president, Quad/Graphics:

This is a transformational event for Quad/Graphics, and we're excited about the opportunities our acquisition of Worldcolor will present our customers, shareholders, and employees. First and foremost, the acquisition will enable us to expand the future of print. Too often people think it's an either/or world in terms of print and digital media that have emerged. The reality is, print drives consumers to digital media and is a vital component of our multichannel media world. There are many multichannel companies who recognize the value of print to deliver their online offering.

...Quad/Graphics has come a long way since our inception in the early 1970s. We have accomplished a lot during the period in which technology in the printing industry was rapidly changing. As a result, we have developed an unmatched expertise in running operations and staying on top of and utilizing the latest technological advances. We create and exploit efficiency, deploy technology, implement automation and ensure that our platform best benefits our customers. We now are ready to take the next step in our development, and that we believe will best allow us to move forward and continue to succeed over the long term and to provide customers with the most efficient and flexible offering in the industry.

Worldcolor is a company whose employees are talented print professionals. Their commitments to customers is much the same as ours. We look forward to welcoming most of them into the Quad family.

As you can imagine, our board of directors, our senior-most managers, and certainly my family and I spent a great deal of time and effort carefully considering and analyzing this transaction. In the end, we decided that the acquisition of Worldcolor is the best decision for our company moving forward, and it was not even a close call. We also decided that the best way to consummate this combination, with the lowest level of risk, is through a largely share-based transaction. We believe that this combination will generate meaningful cash flow that will allow us to pay down debt relatively quickly. This is prudent from a balance sheet perspective and we think is in the best interest of all our stakeholders. For this reason, we plan to become a publicly-traded company concurrent with the closing of the transaction. We believe this public status will provide us with an additional competitive advantage by way of added incentives for our employees and the new currency with which to capitalize on opportunities as they present themselves.

...To be absolutely clear, for the foreseeable future, we will be focused on customers and making this combination work. We long have stated that our private status meant that we could manage for today but also for the long term. At the same time, we've always run Quad/Graphics like a public company, with public company controls and operations in place. We will continue to run our company as we always have, with the focus on the long term and with the values that have made us successful since our founding.

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