Quebecor and World Color in Massive Deal
GREENWICH, CT—Following weeks of industry speculation, Quebecor Printing and World Color Press signed a definitive merger agreement in which Quebecor will acquire all stock in the US $2.7 billion industry giant based here.
The acquisition is reportedly the largest in the history of the printing industry. Officials say the new combined company, to be known as Quebecor World Inc., will be the largest commercial printer in the world, serving customers in magazines, catalogs, books, retail inserts and circulars, and specialty/direct mail printing.
Quebecor Printing will pay approximately US $840 million in cash, representing US $35.69 per share, and will also assume the debt of World Color in the approximate amount of US $1.3 billion.
The board of directors of World Color, by a unanimous vote, recommended acceptance of the offer. Both the tender offer and the merger are expected to be completed within four months.
"Two of the fastest growing commercial printers have joined to create a new industry leader, committed to continued growth, sensitive to customer needs and positioned to set new highs in shareholder expectations," says Charles Cavell, president and CEO of Quebecor Printing. "The World Color management team enjoys a stellar reputation in our industry. The fit of our two companies couldn't be better from the point of view of customers and shareholders," he says.
Robert G. Burton, chairman and CEO of World Color, adds, "Quebecor Printing, with its global presence, and World Color, with its solid position in the United States, will create a tremendous team." Burton will leave following the completion of the takeover, but will become a member of the Quebecor World board of directors.
Pierre Karl Péladeau, vice chairman of Quebecor Printing and president and CEO of Quebecor Inc., notes, "Quebecor is proud to be at the forefront of bringing together two of the most successful printing companies in the world. No two companies are better suited to merge for the good of improved customer service and increased shareholder value."
In the new management structure, Charles Cavell will be president and CEO of Quebecor World. World Color President and COO Marc Reisch will become chairman, president and CEO of Quebecor Printing's and World Color's combined North American operations.
Reisch states, "This is a merger of two very focused growth companies. I look forward to pulling the talent together from both organizations to form the strongest, most responsive management team in the industry."
In addition, a committee of the Office of the President—made up of Cavell, Péladeau, Reisch, Christopher Rudge (Quebecor Printing Canada's president) and Christian Paupe (executive vice president of Quebecor Printing)—will be created to deal with strategic issues in relation to the company's global operations.
The news comes hard on the heels of two very recent World Color acquisitions. The most recent was Providence, RI-based UP/Graphics, which is reportedly one of the largest general commercial printers in New England. The 550-employee UP/Graphics had revenues of approximately $86 million in 1998.
The other recent World Color acquisition was Erlanger, KY-based Metroweb Corp., a publication and commercial printer with annual revenues of approximately $20 million.
