Cadmus Reorganizes, Sells Off Two Divisions

RICHMOND, VA—Cadmus Communications has agreed to sell its Financial Printing and Custom Publishing divisions.

Cadmus officials say these divestitures are part of an ongoing strategy to streamline its business units and focus its resources in select niche markets that the company believes to be poised for aggressive growth.

Commenting on the divestitures, C. Stephenson Gillispie Jr., Cadmus' chairman, president and CEO, notes: "For Cadmus, these transactions mark a new milestone in our strategy to create leading businesses in select niche markets. We are narrowing our focus and concentrating our resources on our key markets—professional communications, specialty pack- aging, point-of-purchase and marketing services—in an effort to achieve more rapid, profitable and consistent growth.'

Cadmus has entered a definitive agreement to sell its Charlotte, NC-based financial communications business to R.R. Donnelley & Sons. The transaction includes all of Cadmus Financial Communications' assets and operations connected with the marketing, selling and distributon of mutual fund, shareholder and other SEC-related communication services.

In fiscal 1998, revenues for the divested business were approximately $43 million. The transaction does not include Cadmus' other Charlotte-based businesses: Specialty Packaging & Promotional Printing and Direct Marketing.

Following the close of the transaction, the facilities will operate as part of Donnelley Financial, one of R.R. Donnelley's fastest-growing business units.

Gillispie explains, "After extensive deliberation, we concluded that financial printing did not complement our core competencies, and our resources could be focused more profitably in other markets.'

Donnelley Financial has operations in 35 locations throughout the United States, as well as in major financial centers around the world.

Paul Masterton, president of Donnelley Financial, says, "We are pleased to have the opportunity to acquire established operations in Maryland, Virginia and North Carolina, and to obtain a seasoned and highly-respected sales force. We were planning to expand in the Southeast United States, and this acquisition gives us a strong and immediate geographic presence in the region's fast-growing business and financial centers, along with a strong customer base and a highly qualified sales force."

As part of the purchase agreement, John Mullis, previously president of Cadmus Financial Communications, has joined the Donnelley Financial business unit as vice president of sales.

"We sought a purchaser for our financial communications business that would provide premium, expanded services for our financial customers and career growth opportunities for our employees. This transaction accomplishes both of these objectives,' Gillispie says.

Cadmus also announced its intention to sell its Custom Publishing business to Pohly & Partners, a Boston-based relationship marketing company. For the fiscal year, which ended June 30, 1998, sales totaled approximately $11 million.

Similarly, Gillispie notes, "In our continued efforts to maximize shareholder value, we concluded that custom publishing was not central to our strategy.

"However, Diana Pohly, the CEO at Pohly & Partners, is an outstanding, forward-thinking, energetic leader who will bring new services to clients and new opportunities to our former associates.'