Quad Plunks Down $100 Million to Obtain Brown Printing
SUSSEX, WI—Quad/Graphics Inc. and Waseca, MN-based Brown Printing have jointly announced a definitive agreement whereby Quad/Graphics will acquire Brown, which serves publishers and catalogers with printing, distribution and integrated media solutions from three manufacturing facilities.
The transaction is subject to customary regulatory clearances and is expected to close in the second half of 2014. Both Quad/Graphics’ board of directors and Brown’s parent company—Gruner + Jahr and its shareholders—approved the transaction.
Quad/Graphics is purchasing Brown for $100 million and intends to use cash on hand or draw on its revolving credit facility to finance the acquisition. Brown expects to generate approximately $350 million in revenues during fiscal year 2014. Quad/Graphics expects that the acquisition will be accretive to earnings and that the purchase price multiple will be less than four times adjusted EBITDA after taking into account anticipated synergies.
“This acquisition is consistent with our ongoing strategy to transform Quad/Graphics and create value for our clients and shareholders,” said Joel Quadracci, Quad/Graphics chairman, president and CEO. “Brown is a well respected, financially strong company focused on delivering superior quality and impeccable customer service to a diverse range of clients. This acquisition will enhance the many ways we help publishers and marketers drive top-line revenues while better controlling their overall total cost of production and distribution.
"With print as our foundation, we will continue to find innovative ways to connect and integrate print with other media channels to increase reach, response and return on investment. We are excited by the opportunities ahead and look forward to welcoming Brown’s clients and employees into our family.”
Mike Amundson, president and CEO of Brown Printing, added: “Brown has prospered under the ownership of Gruner + Jahr and its shareholders for the past 35 years. Their strong financial support along with Brown’s talented and dedicated employees has fueled our growth. Looking forward, we are excited about this acquisition as it will benefit our clients through the expanded depth of the combined platform. In addition, Brown and Quad/Graphics are united by a common culture based on a passion for innovating and providing the highest quality products and client experience in the industry. I am convinced that Quad/Graphics is the best owner for the future of Brown.”
Brown Printing was advised in this transaction by Baker Hostetler. Quad/Graphics was advised by Foley & Lardner LLP.
Cenveo Stock Volatility May Be Related to Moratorium
STAMFORD, CT—In September 2013, Cenveo Inc. acquired certain assets of National Envelope through the bankruptcy process. As part of the consideration for the acquisition, Cenveo issued approximately 2.1 million shares to the debt holders of National Envelope. Under the terms of the purchase agreement, the debt holders were restricted from selling the Cenveo shares for a period of six months from the date of the acquisition.
This six months period has now lapsed. The company believes that the recent increased trading activity and volatility in its stock is largely related to the expiration of the six-month restriction period.
Robert Burton Sr., chairman and CEO, stated: "While we have just entered the second quarter, I am pleased with the progress that we are making across the company. Our integration efforts with National Envelope are in full gear and we are seeing improvements across the rest of our businesses. I look forward to sharing this positive momentum on our first quarter earnings call on May 8, 2014."
Cenveo specializes in offering solutions in the areas of custom boxes, custom labels, shrink sleeve labels, envelopes, commercial printing, content management and publisher solutions. The company provides a one-stop offering through services ranging from design and content management to fulfillment and distribution.
Gannett Sheds Portion of Printing Group, 142 Jobs Lost
MAPLE GROVE, MN—Newspaper publisher Gannett Co. has sold the heatset portion of its printing operation to Sussex, WI-based Quad/Graphics Inc. As a result, 140 Gannett employees lost their jobs, the Star Tribune reported.
According to the newspaper, Quad will relocate the heatset work being done at the Maple Grove plant to existing facilities it has in the region. Gannett will continue to operate coldset newspaper printing out of the Maple Grove facility.
Displaced workers will be eligible for open positions at Quad/Graphics plants nationwide. Its Minnesota plants include Shakopee and St. Cloud.
Goldman Sachs, Koch Partner to Acquire Flint Group
NEW YORK—Goldman Sachs Merchant Banking Division announced that it has partnered with Koch Equity Development LLC, a subsidiary of Koch Industries, to acquire shares representing 100 percent of Flint Group’s share capital from funds advised by private equity firm CVC Capital Partners. Koch Equity Development has agreed to invest with Goldman Sachs in a newly formed entity that will acquire Flint Group.
Flint Group is a global supplier of inks and other print consumables such as flexographic printing plates, blankets, image transfer products and chemicals for pressrooms, to the packaging and the print media industries. Flint Group operates 137 sites in 40 countries and employs some 6,600 people.
“The management team of Flint Group is excited about this planned new ownership, and the opportunities this now presents,” said Antoine Fady, CEO of Flint Group. “The investment by Goldman Sachs Merchant Banking and Koch is a clear vote of confidence in our vision, strategic plans and ‘can do’ culture. Flint Group’s fundamental dedication to safety, sustainability, integrity and compliance will continue to form the foundation of all of our business activities.”
Martin Hintze, co-head of corporate equity investing in Europe of Goldman Sachs Merchant Banking Division, added “The acquisition of Flint Group fits well into our strategy of investing in leading global franchises and growing them organically and through acquisitions. We look forward to working in partnership with Koch Equity Development and Flint Group’s strong management team to execute on their strategy.”
Goldman Sachs Merchant Banking and Koch Equity Development will support the strategy developed by the Flint Group’s management team as it pursues a targeted business mix evolution towards the more attractive and higher growth printed packaging market while maintaining Flint Group’s strong position in the resilient print media business.
This sale remains subject to customary closing conditions and should be completed by the second half of 2014.
Condé Nast's Townsend Named 2014 Prism Award Winner
NEW YORK—The Advisory Board of the NYU School of Continuing and Professional Studies (NYU-SCPS) Graphic Communications Management and Technology (GCMT) graduate program has selected Charles Townsend, CEO of Condé Nast, as the recipient of the 2014 Prism Award. Presented annually, the Prism Award recognizes distinguished leadership in the graphic communications media industry.
Sponsored by the NYU-SCPS Master of Arts in Graphic Communications Management and Technology program, the 28th Annual Prism Award Luncheon will take place on Tuesday, June 17, at Cipriani 42 in New York. Scott Dadich, editor-in-chief of WIRED, will accept the award on Townsend’s behalf and discuss future trends at the nexus of design and technology.
"We are honored and delighted to recognize Charles Townsend, an innovator in the media industry, with the 2014 Prism Award," said Dennis Di Lorenzo, dean of the NYU School of Continuing and Professional Studies. "His leadership qualities and his ability to anticipate and to navigate change in a continuously evolving business environment are an inspiration to us all."
Previous NYU Prism Award recipients include: Ursula Burns, chairman and CEO of Xerox Corp.; Steve Forbes, chairman and editor-in-chief of Forbes Media; Thomas Quinlan, president and CEO of RR Donnelley; Vyomesh (VJ) Joshi, former executive vice president of HP’s Imaging and Printing Group; Cathleen Black, former chairman of Hearst Magazines; Antonio Perez, former president and CEO of Eastman Kodak; Anne Mulcahy, former chairperson and CEO of Xerox Corp.; and Janet Robinson, former president and CEO of The New York Times.
"It is a source of great pride for Condé Nast to join this esteemed group of former recipients in supporting the NYU School of Continuing and Professional Studies," related Townsend. "Talent is at the cornerstone of what makes all our organizations successful—I can think of no better investment in our future than growing these scholarship programs."
The net proceeds of the Prism Award Luncheon help to fund student scholarships, as well as student and program support for the NYU-SCPS GCMT graduate program, which prepares the next generation of media communications industry leaders. Since its inception, the Prism Award Luncheon has raised millions of dollars in scholarship funds for students in the GCMT program.
"Over the years, hundreds of talented and deserving students have benefitted from Prism Award scholarship funds, graduating from the M.A. in Graphic Communications Management and Technology program and launching their own highly successful careers in an industry that continues to grow and thrive,” commented William “Buzz” Apostol, Prism Award Committee co-chair and vice president of sales-Americas at X-Rite/Pantone Inc.
Tickets for the Prism Award Luncheon are priced from $750 per person to $6,000 for a sponsor’s table of eight and $10,000 for a co-chairmanship (which includes a dais seat, as well as a table of eight). Tables, ticket reservations, and additional information are available through the NYU-SCPS Office of Development. Contact Melissa Malebranche at (212) 998‑6950 or by e-mail at email@example.com. Visit www.scps.nyu.edu/prism to learn more about the Prism Award Luncheon and Scholarship.
Arandell Completes Growth Financing Initiative
MENOMONEE FALLS, WI—Arandell Corp., which specializes in providing catalog printing and omni-channel solutions, recently completed a growth financing initiative. "We are pleased with our new capital structure," said Brad Hoffman, Arandell’s president and CFO. "In addition to substantially reducing interest expense, it will also provide us financial flexibility for the future and allows us to reinvest back into the company."
The company’s bank financing is now led by The Private Bank with CapX Partners, Spell Capital, and Farragut Capital Partners also participating in the recently closed financing transaction. The new financing structure arranged for Arandell provides additional funding to address the catalog printer’s continued growth and expansion.
Milwaukee-based Promontory Point Capital served as the financial advisor and investment banker to Arandell Corp. in arranging the company’s new capital structure. The company’s law firm, Reinhart Boerner Van Deuren S.C., served as legal counsel for the transaction.