This morning, Quad/Graphics Inc. and World Color Press Inc. announced they have cleared antitrust regulatory requirements in the United States and Canada in relation to their proposed business combination.
The pending deal was first announced back in January 2010, with Quad/Graphics’ current leader, Joel Quadracci, ready to serve as Chairman, President and CEO of the expanded company. After filing their Pre-Merger (Arrangement) Notification and Report Forms with the U.S. Federal Trade Commission and the U.S. Department of Justice, the companies were required to wait until March 29, 2010, before clearance was provided.
According to a joint statement by the companies, the transaction remains subject to completion of approval under the Investment Canada Act, as well as to the satisfaction of other closing conditions.
If the acquisition is completed, it would create one of the world’s largest printing companies, employing nearly 30,000 people in the U.S., Canada, Latin America and Europe. World Color and Quad/Graphics had aggregate, non-audited revenues of US$5.1 billion – for the 12-month period ended September 30, 2009 – and aggregate non-audited, adjusted EBITDA of US$647 million.
Yellow Media announced today that it will acquire Canadian Phone Directories Holdings Inc. (Canpages) for the sum of $225 million. The deal will combine two of Canada's biggest publishers of directories.
“The acquisition of Canpages will accelerate our business transformation to the digital world,” said Marc P. Tellier, Chief Executive Officer, Yellow Pages Group. “Canpages has built a strong local search business and we are pleased with the prospects of joining forces. It will give us the opportunity to expand our sales force, online capabilities and customer offerings.”
Canpages publishes 84 printed directories across Canada and employs 700 people in Canada, of which 450 are sales consultants.
“I am confident that bringing together two experienced players in the local search industry will benefit both consumers and Canadian businesses,” said Oliver Vincent, CEO of Canpages. Yellow Media says Canpages directories will continue to be published after the acquisition is complete. The Canpages purchase involves $75 million in cash and $150 million in promissory notes.
At the same time, Yellow Pages Group, which is owned by Yellow Media, announced it will sell its U.S. directory business to Ziplocal LP, but terms of the sale were not disclosed.
Yellow Pages Group published its first directory in 1908 as a division of Bell Canada. The company went through numerous changes in the 1980s and the 1990s, eventually separating from Bell Canada and launching its IPO in August 2003. Since then, the company has aggressively acquired other directory publishers, including the Trader Corporation in February 2006.
The Yellow Pages Income Fund is set to become Yellow Media in November once it converts into a corporation structure, the company announced last week. Yellow Media is currently a subsidiary of the Yellow Pages Income Fund. The company employs 2,300 people in Canada and also unveild a new brand image last week.
Domtar Corporation announced that it has entered into an agreement to sell its forest products business to EACOM Timber Corporation for $80 million, plus elements of working capital estimated at $30 to $40 million. Domtar is to receive 19 percent of the proceeds in shares of EACOM. The transaction is expected to close at the end of the second quarter of 2010.
"Our forest products employees have demonstrated tremendous resilience throughout the years. Their sustained efforts to reduce costs and pursue the continuous improvement of operations have positioned the business well for the recovery," said John D. Williams, CEO of Domtar, in a press release. “EACOM will establish its headquarters in Montreal… and will become one of the largest publicly traded lumber producers in Eastern Canada.”
The transaction includes five operating sawmills: Timmins, Nairn Centre and Gogama in Ontario, and Val-d'Or and Matagami in Quebec; as well as two non-operating sawmills: Ear Falls in Ontario and Ste-Marie in Quebec.
The sawmills have approximately 3.5-million cubic metres of annual harvesting rights and a production capacity of close to 900-million board feet. Also included in the transaction is the Sullivan remanufacturing facility in Quebec and Domtar's interests in two investments: Anthony-Domtar Inc. and Elk Lake Planing Mill Limited.
Mar. 30 — Ralph Misale and Grant Malcolm become the new owners of Eclipse Colour and Imaging Corp., one of Canada’s premier large-format printing companies, based in Burlington, Ontario.
Misale, who assumes the role of Chief Operating Officer, and Malcolm, Chief Financial Officer, purchased their new company back in February, from Adams Outdoor Advertising, which continues to hold 18 locations in the United States. Based in Atlanta Georgia, Adams Outdoor purchased Eclipse Imaging back in 1999.
Canadians Misale, who joined Eclipse 14 years ago, and Malcolm, who joined in 2002, were appointed by the company as co-General Managers back in September 2009. According to its Website, Eclipse can be considered a 56-year-old company, when tracing its roots back to 1954 and the establishment of Hamilton Screen Print, part of Toronto burgeoning Highway 401, economic artery.
“We are excited about the opportunity to lead Eclipse, not only as general managers, but now as owner-operators,” stated Misale, in a press release. “Feedback from staff, customers, and suppliers has been overwhelmingly positive and we are extremely optimistic about what the future holds.”
In the press release, Malcolm estimates that some 15 percent of Eclipse’s annual revenues came from Adams-originated print orders in the Midwest, Southeast, and Mid-Atlantic regions of the U.S. “Adams Outdoor was a great parent company, and will continue to be a valued client of Eclipse,” says Malcolm. “We are very confident about the future of outdoor advertising and the retail marketplace in North America.”
Today, Eclipse considers itself as an outdoor media company, specializing in out-of-home advertising, transit printing and in-store retail signage. Since 2002, the company operates out of a 70,000-square-foot production facility.
Graphic Printing Roller has become an licensed manufacturer and seller of rollers using Ryno roller compounds. Graphic Printing Roller, which has plants in Markham, Ontario and St. Leonard, Quebec, will also produce HydroMetric, Web Red rollers for the Canadian market.
According to Ryno Rollers, its products are made to allow printers to use the lightest roller settings to maximize plate and roller life plus has the added benefit of better performance with less wear on plates, bearings and journals.
"Ryno Rollers is pleased to welcome Graphic Printing Roller Ltd. to the Ryno family," said Ryno Roller's Vice-President of Sales and Marketing Roger Giza. "Graphic Printing Roller customers across Canada can now enjoy the benefits of cooler running rollers which absorb little or no roller wash and thus swell, shrink, and harden less than rubber rollers after extended exposure to ink and roller wash."
Ryerson GCM students have won the Grand Prize Helmut Kipphan Cup for top overall student research publication at the Technical Association of the Graphic Arts (TAGA) Conference. Ryerson has won the Cup for the second time in three years.
The submitted publication consists of 160 pages of student-researched papers covering a range of graphic arts-related topics such as security printing, halftone dots, and ink tack on process colour printing. The document was judged for student research, writing, and graphic arts production.
Twelve students from the Ryerson TAGA Student Chapter went down to San Diego for the 62nd Annual Technical Conference to present the project along with faculty members Martin Habekost and Jason Lisi. Habekost and Lisi also made presentations at the conference.
The Kipphan Cup is named after Professor Helmut Kipphan, Head of Advanced and Future Technologies at Heidelberg.
The team had industry support from Lowe-Martin, the International Association of Printing House Craftsmen, Webcom, Fujifilm, York Bindery and Imation. To view the ryeTAGA submission, it is available online at www.ryetaga.com.
Shortly after Domtar Corp. announced the closure of its coated groundwood mill in Mississippi, NewPage Corp. then announced an agreement to purchase Domtar's coated groundwood paper product lines.
The purchase, expected to be completed in April, is to include Domtar’s coated groundwood paper book of business, the Choctaw, Saturn and Jupiter brands, and the coated groundwood product inventory remaining after the Columbus mill closes.
“With Domtar's decision to permanently close its Columbus mill and exit the coated groundwood product sector, we will be working closely with Domtar to ensure that the immediate needs of their customers are met without any disruption of service,” stated Tom Curley, CEO for NewPage, in a press release. “We recognize that customers have a choice in paper suppliers, and we want to earn their business by ensuring they have a seamless transition to NewPage, should they desire to do so.”
NewPage describes itself as the largest coated paper manufacturer in North America, based on production capacity, with US$3.1 billion in net sales for the year ended December 31, 2009. The company’s mills, including a location in Nova Scotia, have a total annual production capacity of approximately 4.4 million tons of paper, including approximately 3.2 million tons of coated paper, 1.0 million tons of uncoated paper and 200,000 tons of specialty paper.
Domtar, meanwhile, describes itself as the largest integrated manufacturer and marketer of uncoated freesheet paper in North America and the second largest in the world based on production capacity.
Canada’s largest printing company reversed a $6.4-million loss in the first quarter of last year, with a profit of $26.2-million in the first-quarter of the current fiscal year, as Transcontinental Inc. nears the completion of its unique newspaper/flyer platform.
“Our first-quarter results show a marked increase in our profitability compared to the first quarter of 2009, and this is the third consecutive quarter in which it has improved,” stated François Olivier, President and CEO, in a press release. Olivier continued to state that the results speak to the company’s implementation of a cost-cutting plan over the past year, as well as the employee's dedication to the rationalization measures.
In the first quarter ended January 31, 2010, Transcontinental recorded consolidated revenues of $559.3 million, compared to $625.4 million in the first quarter 2009, down 11 percent. The company points to an unfavourable exchange rate effect of $20.5 million, as the primary reason for the 11-percent decrease. Transcontinental also points to a negative $18.2-million effect because of the divestiture or closure of plants and publications, as well as a decline in paper prices, which had a negative impact of $10.4 million on its revenues.
Within its financial statement, Transcontinental expects positive numbers in its upcoming earnings reports, as it continues with the rationalization plan. The company, for example, will generate proceeds of more than US$100 million with the pending (second-quarter) completion of a deal to sell most of its U.S.-based direct-mail assets to IWCO Direct.
The company also stated that it expects to have its new hybrid newspaper and flyer-printing platform fully operational by late 2010. In July 2009, Transcontinental signed a deal to purchase four triple-wide KBA Commander CT presses – a total of 16 towers – to be installed at plants in Toronto, Calgary and Vancouver. KBA states that each press line has a maximum hourly output of 90,000 full-colour newspapers, inserts or magazines with up to 48 broadsheet or 96 tabloid pages.
Presstek has announced that it has settled a 2007 investigation with the Securities Exchange Commission regarding the company's financials from that period. Presstek has agreed to pay a civil penalty of US$400,000, a sum which had been allotted in the company's third quarter of last year.
"This investigation related to matters that occurred prior to the changes in executive leadership which took place in 2007," said Jeff Jacobson, Presstek's Chairman, President and Chief Executive Officer. "We feel very strongly about corporate governance and we are pleased to put this legacy issue behind us."
Presstek also posted its Q4 results, which saw the company post a loss of US$700,000. The loss is in improvement over its 2008 Q4 numbers, which resulted in a loss of $900,000. Revenues, however, saw a sharp drop over the fourth quarter of 2008, plunging 21 percent from $42.3 million to $33.5 million. Equipment revenue faced the steepest decline of 40 percent. The company managed to cut expenses year-over-year by $5 million, or 29 percent.
"These results represent our first sequential quarterly increase in revenue since the second quarter of 2008; a return to positive adjusted EBITDA after two negative quarters; and a strengthening of our overall financial position as we were able to significantly reduce our debt net of cash in the quarter," said Jacobson. "These positive financial results combined with the recent sale of Lasertel, the closing on our new credit facility, the completion of the SEC review and the successful result achieved with the International Trade Commission in the VIM patent litigation give us a great deal of momentum as we move forward."
Warren Werbitt, CEO and founder of Pazazz Printing, last week submitted a Notice of Intention with Bankruptcy Canada, which means the Montreal company intends to submit a proposal for restructuring under the Companies’ Creditors Arrangement Act.
A Notice of Intention document is filed with the Official Receiver as the first step under the Companies’ Creditors Arrangement Act (CCAA). In a telephone conversation with PrintAction, Werbitt states that he plans to restructure Pazazz Printing through the CCAA process.
"Moving forward, I have every intention of maintaining the same level of integrity and respect that I have had for this industry over the past 18 years," says Werbitt, "And for all of the employees, clients and suppliers who have supported Pazazz. I am taking the bull by the horns and I am not turning away."
In late 2007, Werbitt became a beacon for the future of Canadian printing, after producing a YouTube video called Printing’s Alive. He used this attention to support the strategic efforts of associations like the NAPL and the CPIA’s scholarship trust fund. Werbitt continued to say that several industry members and suppliers have shown tremendous support for Pazazz when he notified them about the filing last week.
While many printing companies have suffered over the past year and a half of economic turmoil, Pazazz’ situation was amplified based on several large capital investments and commitments made just prior to the Wall Street meltdown. An October 2008 press release issued by the company, describes how Pazazz had invested $7 million over the past few years, which included moving into a new 65,000-square-foot facility and purchasing a 56-inch, 6-colour KBA press. In September 2009, Pazazz also installed a new Xerox iGen4 press to bolster its toner-based production.
CBC News anchor Diana Swain, a Gemini Award winner, will host the Fifth Annual Environmental Printing Awards gala being held on April 8, at The Eglinton Grand in Toronto.
Swain is the winner of the prestigious B'Nai Brith Canada Prize for human rights reporting, two-time Gold Medal winner at the New York Festivals, and a two-time winner of the Michener Award for public service in journalism. She is currently the host of CBC's flagship local news show, CBC News at Six Toronto and is also the alternate anchor of The National.
Celebrating its fifth year, the Environmental Printing Awards is a program set up to recognize the best of environmentally progressive printing in Canada. The deadline to enter the program is March 19th, which is also the last day to purchase early-bird tickets.
To celebrate the fifth year of the program, the awards gala features a keynote addressed by the CEO of the David Suzuki Foundation, Peter Robinson. The inaugural gala was hosted by Dr. David Suzuki, followed by notable speakers the Right Honourable Brian Mulroney, Stephen Lewis and Tzeporah Berman.
For more information visit the Environmental Printing Awards website.
After weeks of acquisition disruption by a group of Océ shareholders, Canon Inc.’s Board of Directors, including Chairman Fujio Mitarai and President Tsuneji Uchida, today declared that the company’s approximate US$1.1 billion offer is unconditional.
Canon originally made a €730 million offer to purchase Océ back in November 2009, at the time stating the offer must reach an 85 percent acceptance from Océ shareholders for the acquisition to be unconditional. But in mid-January 2010, Bloomberg news reported that the deal might be in jeopardy “after holders of 13 percent of the Dutch company said they won’t tender their shares and a group representing about 200 investors said the offer was too low.”
Bloomberg’s January 13 article also pointed out that the deal was fully supported by Océ executives and that, at the time, there were no counter bids on the table, while financial analysts pointed out that it was not vital for Canon to obtain 100 percent of Océ’s shares.
Today, Canon’s board announced it is satisfied with its 71 percent of shares, despite being well short of its previously announced 85 percent threshold, and that Canon intends to buy all remaining shares on an unconditional basis.
As a result, it is likely that the disgruntled shareholders, whose lawsuit was rejected yesterday by a Dutch court, will have no choice but to accept the deal. A report today by Reuters quotes analyst Jos Versteeg of Theodoor Gilissen, saying, “It's a done deal now.”
Read full Reuters report: Canon says Oce bid unconditional, seeks 100 percent
Heidelberg Canada President Richard Armstrong confirms Mississauga facility will stay open despite major restructuring efforts that will see marketing and other aspects move south.
Heidelberg Canada, faced with what it describes as "continued weak demand," has made considerable cuts to staff and states it will only be closing the demonstration area within its facility on Kenway Drive in Mississauga.
In an interview with PrintAction this morning, Armstrong declined to comment on the specific number of jobs that will be cut at Heidelberg Canada with the restructuring, "I don't want to get into the numbers, but we have let go a considerable number of people.
"Primary areas that have been affected are administration, marketing, and product management, and areas [where] we can share resources around between the countries. We've made some reductions, but we've tried to keep the number of service people still strong."
Press demonstrations, as a result, will be handled through its Atlanta facility, which is larger. According to Armstrong the rest of the facility, which also houses a substantial warehouse, will continue to operate and the company structure will remain unchanged, with Heidelberg Canada remaining a distinct entity.
When asked about the rationale behind the restructuring, Armstrong said it was a move to maintain profitability: "The way I see the market out there, we've got the economy at work which has really curtailed the amount of capital equipment that's being purchased, which has impacted us. Also, I see the future having a demand for less machines, primarily due to the fact that the number of printed sheets in sheetfed [which] I don't see it growing. But I do see that the productivity of our machines, and our competitor's machines, have really doubled in the last decade, so the sheer mass of printing machines and various other machines is going to be less. So we're trying to prepare ourselves for a different type of future."
In the fourth quarter of 2009, Worldcolor generated consolidated revenues from continuing operations of $848 million compared to $1.0 billion in the fourth quarter of 2008, which represents a decline of 18 percent. Also in the fourth quarter of 2009, Worldcolor reported that its cost of sales decreased by 23 percent compared to last year's quarter.
In late January of this year, Quad/Graphics Inc. announced its intent to acquire Montreal-based World Color Press Inc. The transaction is expected to close approximately in the summer of 2010.
Consolidated operating income in the fourth quarter of 2009 before IAROC was $83 million, compared to $50 million in the fourth quarter of 2008. Worldcolor also reported that its consolidated adjusted EBITDA was $132 million in the fourth quarter of 2009, compared to $118 million in the fourth quarter of 2008.
For the combined full year of 2009, Worldcolor reported combined adjusted EBITDA of $329 million, nearly 60 percent of which was earned in the five-month period after emerging from bankruptcy. The 2009 combined consolidated net loss from continuing operations was $154 million, compared to a net loss from continuing operations of $944 million for the same period in 2008.
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