Quebecor World Spins Off Its Premedia Operations
MONTREAL—Continuing to sharpen its focus as it grows, Quebecor World has spun off its premedia operations into a separate subsidiary, and is shedding its CD-ROM production facilities.
The company has created Que-Net Media, a wholly owned subsidiary that will bring together the full range of digital and premedia assets within Quebecor World "to bring greater focus to providing a more comprehensive range of solutions to the customer base," company officials say.
Chris Rudge, president of Quebecor World's Canadian operations, will become president of Que-Net Media. Officials say the subsidiary will expand upon Quebecor World's existing network of premedia centers to establish a global network of digital content centers by developing and expanding its existing premedia and digital photography centers.
Officials note that one market for the new subsidiary's services will be e-retailers and e-catalogers, which are turning to print products to create brand awareness and attract Website traffic. They note, for example, that advertising in Quebecor World's U.S. magazine group was up 9.5 percent in the first two months of this year.
"The Internet is the best thing that ever happened to print," declares Charles G. Cavell, president and CEO of Quebecor World. "We've just finished an unprecedented first quarter in volume, thanks to dotcom demand. Now we're re-orienting our business to ensure that we can best serve our customers' needs for premedia services, whether this be for print or Web formats."
With the dotcom print demand comes the need for digital photography and digital text management. Quebecor World has existing facilities that have traditionally provided these services for print customers. Revenues from these facilities are approximately US$150 million annually. Of this amount, close to 10 percent is now coming from unsolicited demand for Web marketing services.
Quebecor World's current network of digital and conventional photography studios in Chicago, New York, Toronto, Montreal, Orlando, FL, and Halifax, Nova Scotia, will be expanded across the continent. In addition, a series of new, high-technology Customer Solutions Centers will be established in Toronto, Chicago, New York and Los Angeles. The new company will also contract the Que-Net fiber optics network that currently connects Quebecor World plants, premedia centers and major customers.
A strategic alliance will be formed with Informission-Intellia, which will provide Web-enabled e-commerce tools including digital asset management systems, automated publishing systems and e-catalog solutions.
Meanwhile, Quebecor World is handing off its CD-ROM production capabilities. It has reached an agreement to sell the North American operations of Print Northwest, consisting of two software manufacturing and fulfillment facilities located in Fife, WA, and Westborough, MA. These operations are being sold to Vancouver-based Q-Media.
Under the terms of the agreement, Quebecor World will receive a total consideration of US$63 million, comprising cash of US$58 million and US$5 million worth of Q-Media shares. In addition, Q-Media will continue to perform software manufacturing, printing, assembly and fulfillment services for Quebecor World.
"This divestiture is in line with our growth strategy and will enable Quebecor World to better focus on its core business. Currently, the North American operations of Quebecor Integrated Media account for slightly more than 1 percent of our consolidated revenues," Cavell notes. "On the other hand, this transaction will provide Q-Media with a world-class facility, which complements its strategic focus and strengthens its market position in the U.S."