Mergers & Acquisitions

CanWest Global Communications, operating under bankruptcy since October 2009, yesterday agreed to sell its newspapers assets for $1.1-billion to a group of bondholders led by National Post President and CEO, Paul Godfrey.

Godfrey’s bidding group holds 9.25 percent of senior subordinated notes in Canwest Limited Partnership (CLP), a publishing division controlling the newspaper assets, which is described as Canada’s largest newspaper chain (46 dailies and weeklies), including the National Post.

The court-appointed monitor of Canwest, FTI Consulting Canada, in consultation with the RBC Capital Markets, “determined that the bid by members of [Godfrey’s group] constituted a superior cash offer,” according to a company statement, yesterday. The purchase price of approximately $1.1 billion includes $950 million in cash funding. CLP owes senior secured lenders around $925 million.

Canwest is now advancing the bid for court approval on May 17, 2010, while targeting to close the deal on or before July 15, 2010.

Associated articles about the pending purchase:

Jennifer Wells, Toronto Star: CanWest deal all about local papers

Andrew Willis, The Globe: Who played CanWest right?

Jamie Sturgeon, Financial Post: Bondholders to buy Canwest newspaper chain

Susan Krashinsky, The Globe: With a salesman's touch, Paul Godfrey claims CanWest

Theresa Tedesco, Financial Post: New role a ‘great privilege’

Torstar Corporation ended weeks of speculation by announcing that it has placed a formal bid for the newspaper and digital assets of Canwest Limited Partnership. Financial details of the bid wer not disclosed.

Canwest LP, which includes the National Post, Montreal Gazette and 44 other newspapers, has been up for sale since January. The bidding deadline lapsed last Friday at midnight and it was initially unclear if Torstar submitted a bid due to questions surrounding its financial backer, Fairfax. If Torstar's bid is accepted, it will become the largest newspaper publisher in the country.

Other bidders include Black Press, which is led by President David Black, who controls a chain of 70 newspapers on the West coast, and former Canwest CEO Leonard Asper. In July 2007, Black Press lost a $405-million bid for Osprey Media to Quebecor.

Canwest has also announced the sale of its over-the-air television assets to Shaw Communications of Calgary. The deal is said to be worth over $2 billion and includes paying $700 million to Goldman Sachs for its stake, which it acquired through the purchase of Alliance Atlantis in 2007.

Pal and Robbie Dhanju, brothers and co-owners of Millenium Printing, finalized the purchase of Mississauga-based KingsWeb, which includes the prepress-focused Queenstone Services and bindery/fulfillment-focused TWS operations.

As opposed to an asset purchase, Millenium on April 29 opted to buy the entire 50,000-square-foot plant and all of its operations, because it runs a Mitsubishi-based pressroom like KingsWeb – in terms of sheetfed. The main reason for the purchase, however, was for Millenium to move into web-offset production.

“We were looking for a web [offset] machine for quite some time because there was a big need, especially for us,” says Neeraj Gupta, Millenium’s Marketing Manager. “Whenever we were doing some big runs it really used to hamper our production on the other jobs.”

Back in March 2010, KingsWeb closed its doors after 25 years of operating as a family-run commercial printer. At the time, the company had approximately 70 employees. “We are trying to catch up with some of their existing staff,” says Gupta, “because the company was off for two months and a lot of them have already been placed elsewhere.”

As a trade printer, Millenium is very tight with Toronto’s print-broker community and expects these relationships to drive a lot of work onto its 6-colour Mitsubishi web press, which is uniquely built to handle both heatset and coldset work. Millenium also runs a unique 8-colour, 40-inch sheetfed press, after purchasing a tandem-designed Mitsubishi DIAMOND 3000 about two years ago.

“It has four bottom units and four top units, so the sheet flows straight,” says Gupta, as he explains why Mitsubishi’s tandem press was chosen over a more common perfecting design. “A lot of times people have problems with marking, especially on thicker stocks when the sheet flips. With our press, there is no marking because the sheet is going straight through.”

When Millenium purchased the Mitsubishi DIAMOND 3000, Pal and Robbie Dhanju moved into a new 40,000-square-foot plant in Concord, Ontario, which highlights the company’s steady growth over the past five years. “We were basically doubling our sales with every move,” says Gupta. After founding Millenium a little over 10 years ago, in a 5,000-square-foot Woodbridge plant with a 25-inch Heidelberg, the brothers made a significant move by purchasing their first 40-inch Mitsubishi about five years ago and moving into a 12,000-square-foot, Markham-based plant.

While Millenium will remain headquartered out of the Concord plant, the company basically doubles its size again with the purchase of KingsWeb and, in particular, the full-size Mitsubishi web. “For us, it is really a feather in our cap because [a web press] was the only thing missing from our basket,” says Gupta. “We are still deciding whether to carry on with the KingsWeb name… or if [at the KingsWeb plant] we should use the Millenium name, which is a very strong brand in the trade circle.”

EFI has announced it will be acquiring Radius Solutions, a management software provider for the printing and packaging industries. The move will give EFI more offerings in its Advanced Professional Print Software division (APPS).

"We are very pleased to add Radius to our growing portfolio of industry-leading software solutions targeted to the print industry," said Marc Olin, Sr. VP/GM APPS of EFI. "EFI's goal is to offer our customers a complete product portfolio that assists them from job creation to production, while allowing them to be more efficient and effective, and ultimately, more profitable. Radius allows us to bring this concept to the packaging market, which is one of the largest segments of the print market and an area of strategic focus for EFI, joining our Pace and Monarch MIS systems which are targeted to the display graphics and commercial print markets."

Radius Solutions is headquartered in Chicago, Illinois with direct operations in the United States and Europe. Radius brings many years of experience developing and deploying applications developed specifically to manage the unique needs of packaging and printing organizations. Radius has established itself as a provider of management information systems specifically designed to help flexible packaging, folding carton and label printers manage their operations.

"We are very excited to have Radius Solutions join the EFI family," said David Taylor, President and CEO of Radius Solutions. "Our ERP packaging software fits strategically within EFI's solutions portfolio. Our clients will gain a supplier with a global footprint and the additional resources of a tier one organization. I look forward to managing the Radius product line within their world class organization."

Details of the transaction were not released and the deal is still subject to various closing conditions.

Both WIFAG and manroland, yesterday, issued short statements about ending acquisition negotiations. Back in February 2010, manroland announced it was pursuing the purchase of WIFAG, a Swiss-based developer of newspaper presses and technology. WIFAG had earlier indicated its need to find a business partner.

The statements from both companies indicate, that during negotiations, it was not possible to satisfy the interests of each company through acquisition. Both companies also indicated they plan to continue cooperating on a technical level.

According to WIFAG’s statement, “Based on the findings of the last three months, WIFAG will now realize a service business model independently.” The statement concluded, “negotiations are being carried out in relation to the sale of individual processing centers in parallel to the restructuring process.”

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.

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.

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

German press manufacturer manroland AG is currently negotiating to purchase WIFAG AG, a Germany-based technology and services company that specializes in the newspaper printing market.

manroland, which also holds a strong, global market-share position in the newspaper market, has signed a letter of intent for the purchase. Negotiations are expectd to be finalized this spring.

“Our industry is marked by an ongoing and necessary consolidation. The current situation allows us to actively grasp the opportunities in the market to strengthen our business,” says Gerd Finkbeiner, CEO of manroland.

Last fall, WIFAG AG announced the reduction of 300 jobs and the search for a strategic business partner.

David Shea, Chairman and CEO of Bowne, late yesterday announced an agreement that would see Chicago-based R.R. Donnelley & Sons purchase New York-based Bowne & Co. for approximately US$481 million in cash.

Shea, 53, first joined Bowne during that company’s 1998 acquisition of Donnelley Enterprise Solutions Inc. He was named as Bowne’s Chairman and CEO in 2006. In a joint statement about the pending RRD acquisition, Shea stated, "R.R. Donnelley's broader array of products and services will quickly create expanded opportunities for Bowne's customers and employees.” 

Bowne primarily operates in various financial-services sectors around the world, with 50 global offices and 2,800 employees. In Canada, Bowne has locations in Calgary, Montréal, Saint-Laurent, Toronto and Vancouver.

“Bowne is an exceptional fit with RR Donnelley," stated Thomas Quinlan, RR Donnelley's CEO. "This combination satisfies all of the strategic imperatives that we evaluate as we consider acquisitions.” 

News of the acquisition, approved by the boards of both companies at US$11.50 per share, came late yesterday as R.R. Donnelley announced its fourth-quarter results, including a net loss of US$79.5 million relative to the year-ago quarter. The company also reported a full-year cash flow from operations of US$1.4 billion. Bowne generated revenues of approximately US$675 million during 2009.

Both R.R. Donnelley and Bowne are two of the more historic printing companies operating in North America, at 145 years of age and 253 years of age, respectively.

Cober Printing Ltd. finalized a deal to take on the sales staff and clients of Kitchener-based Allprint Ainsworth Associates, which filed for bankruptcy protection on February 5.

“We are in the process of transitioning all the sales staff and clients over to us, as well as any production people needed to support those sales,” says Peter Cober, President of  Cober Printing, which is also located in Kitchener. “We have met with all of the salespeople and they are on board, and the clients also seem to be quite comfortable with it.

“The rest of my day will be spent focusing on the company’s CSRs and estimators and support staff,” continues Cober, who expects to complete these arrangements sometime next week. Work from Allprint is already starting to filter into the Cober Printing facility.

Cober says he is currently not pursuing any of the hard assets from Allprint Ainsworth, which includes three older 40-inch Heidelberg perfecting presses, as well as a 29-inch Heidelberg perfector and an HP Indigo 5000. While Cober Printing also runs Heidelberg perfecting presses, including a 40-inch 10-colour and a 40-inch 5-colour, Allprint’s offset machines are of an older generation.  

Cober Printing has long been recognized as one of Canada’s most technologically innovative commercial printing companies. The company currently runs three HP Indigo presses, including a recently purchased 7000 model.

“We have a lot of expertise with Web-to-print applications and digital storefronts, in-house mailing and very sophisticated distribution and fulfillment, with RFID and barcodes, for example,” says Cober. “So we think we have the opportunity to do a fair bit of up-selling with [Allprint’s] existing sheetfed clients – to get more dollars out of them.”

While Allprint has filed for bankruptcy protection, the company is more than likely headed for receivership. Company owner, Klaus Ertle, said he was retiring last Friday, February 12, as the 50,000-square-foot Allprint facility ceased operations.

If Allprint Ainsworth does enter receivership, its presses and hard assets would be then auctioned off.

Read PrintAction's February 16 story: Allprint Ainsworth Enters Bankruptcy Protection


Flint Group today signed an agreement to acquire Torda, a manufacturer of printing inks for packaging markets in Northern and Eastern Europe, the Balkans and the Middle East. In 2009, Torda generated revenues of approximately €23 million.

According to Flint, this acquisition represents the company’s third step taken in the past 12 months to expand into Eastern European markets. In 2009, Flint Group acquired the Russian packaging ink manufacturer and distributor Premo Inks. In January 2010, Flint Group announced the expansion to its packaging inks operation in Poland.

“We are delighted about the agreement with Torda. The company’s business model and performance is an excellent fit for our strategy,” stated Dr. Dirk Aulbert, President of Flint Group’s Packaging and Narrow Web division, in a press release. “Torda’s setup, especially in Eastern Europe, the Balkans and the Middle East, ideally complements and expands our network of manufacturing and service facilities into these growth markets.”

The transaction is expected to close by the end of March 2010.

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