Wallace Computer Services Sells Divisions
LISLE, IL—Looking to unload non-core businesses and raise some capital, Wallace Computer Services has announced the sale of two of its properties.
Houston-based Consolidated Graphics has signed a letter of intent to acquire Mercury Printing, a Wallace-owned facility located in Memphis, TN.
"Mercury Printing was acquired in December 1997 as part of the acquisition of Graphic Industries," explains Mike Halloran, Wallace's senior vice president of planning and acquisitions.
"While Mercury is a solid performing operation, it was one of the lower-volume Graphic facilities, and its strategic focus and primary product line are not consistent with Wallace's target market: the Fortune 2000."
Mercury Printing has served the Mid-south region for 37 years, providing a full range of printing services from electronic prepress to customized fulfillment. Bill Hyatt will continue to lead the company as president.
"By joining Consolidated Graphics, we gain access to the managerial strengths and experience of the industry leader. With these considerable resources, Mercury Printing should enjoy continued growth and success," Hyatt notes.
At the same time, Boise Cascade Office Products acquired Wallace Computer Services' $40 million contract stationery business.
"The volume of our contract stationery business had reached the point that significant investments would be necessary to accommodate continued growth," explains Mike Duffield, Wallace's president and COO.
"Management has concluded that investments in our print-management program will have a higher rate of return for our shareholders, and these office supply contracts can be more profitably managed by Boise, who is larger and has already made those investments."
"The acquisition of Wallace's office supplies business fits very well into our business model," explains Chris Milliken, Boise's president and CEO.
"We have the opportunity to further leverage our infrastructure and provide these customers a complete range of office products, computer consumables and promotional products."
Boise officials say the company intends for many of these customers to be integrated into Boise-Wallace Single Source, the companies' integrated supply alliance. B-W Single Source, established in January 1998, is an integrated system for ordering a broad range of office supplies, printed materials and other business consumables, which allows customers to reduce procurement costs.
"We are enthusiastic about welcoming approximately 100 additional customers to B-W Single Source," says Milliken. "Since its launch a year ago,
B-W Single Source has become an integrated supply leader in our industry. It is yet another demonstration of our commitment to offer customers the most efficient, innovative and technologically advanced ways to do business."
Wallace expects to record a slight gain in its fiscal 1999 second quarter earnings on completion of the sale.
