YEAR IN REVIEW — 2006: BANTA ON THE LOOSE
Windy City printing giant RR Donnelley unveiled its new mail consolidation and distribution management services facility in Dallas. The new plant allows Donnelley to better serve direct response marketers, magazine publishers, catalogers and other mailers in the Southwest.
Koenig & Bauer AG (KBA) CEO Albrecht Bolza-Schunemann told a German newspaper that KBA was interested in creating a relationship with press manufacturing competitor MAN Roland, either through a partnership or acquisition. MAN Roland responded that it was premature to speculate on a future relationship.
The summer provided some lessons on good and bad M&A etiquette. Valassis Communications, of Livonia, MI, agreed to shell out $37 per share, or $1.3 billion, for ADVO. A short time later, Valassis sued ADVO in chancery court to rescind the merger agreement, claiming ADVO intentionally provided false information and “withheld material information” regarding operating income. ADVO’s shareholders approved the deal anyway, and the company returned volley with a counter-suit against Valassis.
In a more peaceful, unlitigated deal, Cenveo acquired prescription label specialist Rx Label Technology, which generates $40 million in annual revenues, from Pfingsten Partners and Hilco Equity Partners.
In Baltimore, Vertis became Vertis Communications while, on the association front, George Ryan left his post as executive vice president and COO of the PIA/GATF to take over as president and CEO of the Printing Association of Florida.
The summer didn’t truly heat up, though, until Burton made his bid to acquire Menasha, WI-based Banta. Stephanie Streeter, chairman, president and CEO of Banta, rejected early bids of $46 and $47 a share, then announced the company would explore strategic alternatives aimed at creating shareholder value. One such move was to declare a special $16 dividend. Banta, meanwhile, reorganized its print sector to cut costs in the face of plummeting earnings.
The industry’s two heaviest hitters, meanwhile, were looking for ways to cure the summertime blues. Wes Lucas, the new Quebecor World president and CEO, unveiled a transformation plan that included reducing the company’s workforce by about 1,700 in 2006, with facility closures in Tennessee, Ohio and Wisconsin. RR Donnelley, on the other hand, reportedly held talks with several leveraged buyout (LBO) firms. The company wouldn’t comment on the published reports, but it didn’t take long to realize that Donnelley had a change of heart and direction.