Quad/Graphics to Acquire Worldcolor
Mark Angelson has a long tenure in public company management and an unmatched record of success in leading consolidations in our industry and creating value for public company shareholders. I am pleased that he will join our Board and that we will benefit from his experience as we integrate these two companies,” concluded Mr. Quadracci.
Through the acquisition, Quad/Graphics plans to achieve greater operational efficiencies, capacity rationalization, enhanced production flexibility and reduced cycle time, and significantly improve its supply chain management capabilities. Additionally, Quad/Graphics expects to benefit from a strong pro forma credit profile with enhanced liquidity and generate solid free cash flow.
Quadracci will serve as Chairman, President and Chief Executive Officer of the expanded company. The future Board will be comprised of the six current Quad/Graphics directors and two Worldcolor directors: Mr. Angelson, who will Chair the Board Committee on Integration and Consolidation, and a director to be named prior to closing, who will become a member of the Audit Committee, bolstering Quad/Graphics’ commitment to excellence in financial reporting.
Each Worldcolor Common Share outstanding at closing will be converted after a multi-step transaction into a number of Class A Common Shares of Quad/Graphics at a Share Exchange Ratio to be determined at closing. Worldcolor has Convertible Preferred Shares (and related accrued but unpaid dividends) that at the option of each holder, may be converted into Worldcolor Common Shares or, if not previously converted, will be redeemed for cash at U.S. $8.00 per share. Worldcolor has two series of Warrants outstanding that either convert to Worldcolor Common Shares or will be redeemed for cash at a price in accordance with contractually specified formulas.
Worldcolor Common Shareholders will receive Quad/Graphics Class A Common Shares, each having one vote per share, for approximately 40 percent total ownership of the Company. Quad/Graphics’ shareholders will continue to own Class A, Class B and Class C shares for approximately 60 percent total ownership of the Company. The Harry V. Quadracci family will control the Company through ownership of the high-voting Class B shares. The Class C Shares are owned by a qualified retirement trust for Quad/Graphics employees. Any future dividend or consideration received will be distributed pro rata regardless of share class. The Class A Common Shares are expected to afford holders enhanced liquidity. Neither the Class B nor Class C Shares are expected to be publicly traded.