Final Chapter for Courier Gets Written—Mark Michelson

It appeared that Courier’s roughly 1,500 employees would all be issued Quad/Graphics’ signature dark-blue work shirts to wear—a team-building concept initiated by the late Harry V. Quadracci many years ago. But that’s not how the closing chapter would ultimately be written for North America’s second largest book manufacturer.

Initially, Quad/Graphics and Courier announced a definitive agreement on Jan. 16 whereby Quad would purchase Courier for $260 million. But then Quad’s arch-nemesis, RR Donnelley (RRD), swept in Jan. 27 with an unsolicited bid to acquire Courier for about $261 million, plus the assumption of Courier’s net debt and payout of outstanding equity awards. Courier’s board and financial advisors determined the RRD offer to be superior and, on Feb. 5, announced that the $275 million-in-sales firm had accepted RRD’s bid over Quad’s.

Quad/Graphics didn’t walk away empty-handed, however. Courier had to pay Quad a $10 million termination fee (which Courier said would be paid in full by RRD) to comply with a clause written into their original sales agreement. So, it appears Quad/Graphics, by that financial measure, got a windfall—despite the fact that not buying Courier relinquished significant digital book printing and front-end expertise, as well as textbook, trade and religious publisher customer share—to Donnelley’s already formidable book manufacturing platform.

Either way, the battle that ensued between Quad and RRD to acquire Courier does illustrate the seminal shift emerging within today’s book publishing and manufacturing supply chain. High-speed digital inkjet printing capabilities are altering the landscape by enabling ease of customization; on-demand, short-run output of current and backlist titles; and game-changing production and warehousing cost savings via zero inventory models. Quad/Graphics will also still forge ahead with plans to install 20 high-speed HP color inkjet presses during the next three years (five in 2015 alone) for book manufacturing.

The final chapter has now been penned for Courier Corp. as a standalone company—a venerable concern that dates back to 1824. Nonetheless, the paradigm shift unfolding within the once-staid, traditional book publishing and manufacturing model represents a new industry chapter that’s being written each and every day.