Report: Donnelley Talking LBO

CHICAGO—An annonymous source told the Chicago Tribune that RR Donnelley has held talks with leveraged buyout firms, two of which are believed to be Madison Dearborn Partners and Blackstone Group. The paper said that talks are in the due diligence stage and do not guarantee a deal will be struck.

Taking Donnelley private could have a starting price of around $11 billion, the source told the Tribune.

Not everyone feels Donnelley is an ideal fit for an LBO. Gimme Credit analyst Dave Novosel, in a report released Wednesday, believes the company lacks the kind of free-flow cash leveraged buyers look for to lower debt incurred in buyouts, nor does it have meaningful convertible assets to finance an LBO.

Donnelley CEO Mark Angelson himself was a partner with Big Flower Press, formed with the late Ted Ammon, to acquire printing companies.