Mergers & Acquisitions

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Canon originally made a €730 million offer to purchase Océ back in November 2009, at the time stating the offer must reach an 85 percent acceptance from Océ shareholders for the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.



Photo by Paul OrensteinFrançois Olivier, President and CEO of Montreal-based Transcontinental Inc., announced today that Canada’s largest printing company has signed an agreement to sell its U.S.-based direct-mail operations to IWCO Direct of Minnesota.

The agreement, with an undisclosed price tag, includes substantially all of the assets of Transcontinental's U.S. direct-mail group in Fort Worth, Texas; Downey, California; and Warminster and Hamburg, Pennsylvania. Transcontinental expects to close the sale by the end of its second quarter.


Transcontinental's direct-mail group in the United States generated revenues of US$153 million in 2009 and employs about 1,200 people. "Transcontinental has decided to focus on its other market segments," stated François Olivier, in a press release. "The sale of our U.S. high-volume direct mail operations will benefit customers, employees and the industry." 



IWCO Direct employs more than 1,200 people and lists the following regional sales locations in the United States: Los Angeles, Minneapolis, Naples (Florida), New York. Philadelphia, Richmond (Virginia), San Francisco, and St. Louis.

"This [acquisition] provides a robust national total package footprint for our customers seeking innovative and cost-effective programs for customer acquisition, loyalty and engagement programs anchored by powerful strategy development," said Jim Andersen, IWCO Direct President and CEO.



Xerox Corp. becomes a US$22-billion technology giant after finalizing the US$6.4 billion purchase of Affiliated Computer Services, self-described as the largest diversified business process outsourcing (BPO) firm in the world.

On an annual basis, Affiliated Computer Services (ACS), for example, processes over 1-million credit card applications and 12-million student loans, while also providing human-resource services for more than 4.4-million employees and retirees.



With the deal completed yesterday, Xerox now cliams itself as a US$22-billion technology and services company for business process and document management – a US$500-billion market, according to the company. Xerox ranked 147th on last year’s Fortune 500 list, with annual revenues of US$17.6, produced by Fortune magazine.

“For the past 50 years, Xerox has fortified its leadership in document management, creating new markets through our renowned innovation,” stated Xerox CEO Ursula Burns, in a press release, while also referring to the company as the new Xerox – “With ACS, we take another step forward.”

ACS will initially be branded ACS, A Xerox Company.  It will continue to be led by CEO Lynn Blodgett, who has been elected by the Xerox Board of Directors as an executive VP for the parent company – reporting directly to Burns.

“The breadth of ACS’ offerings – from HR benefits management and IT support to automated toll collection and electronic health records – is a significant competitive advantage and one we will continue to leverage through investments, innovation and global expansion,” stated Burns.





The Guardian newspaper of Prince Edward Island reports that Kwik Kopy Design and Print Centre of Charlottetown has acquired Island Offset Inc.

According to the newspaper article, Kwik Kopy Design and Print Centre is operated by brothers Shawn and Troy MacKenzie.

The Kwik Kopy Design and Print Centre has been in business since 1984, according to the paper, and currently employs 30 full-time staff.



Read the article from The Guardian





Contac Services Inc., founded in 1978 as a third-party logistics company for the travel industry, has purchased the assets of Forum Productions Inc., a commercial printer based in Delta, British Columbia.

Contac, based in Vancouver, lists the following service entities within its business: Contac Print, Marketing, Logistics and Travel.

According to a press release about the deal, Contac is picking up 39 pieces of equipment from Forum, including: a 6-colour, 40-inch press; a 4-colour, 29-inch UV hybrid press; and a die-cutter/foiler.

With the added capacity and technology, Contac claims it now has one of the leading printing facilities in Canada, as it can now increase daily print output to more than 1.6-million sheets per 8-hour shift on offset presses.

“With a powerful and innovative print production facility, Contac has both the equipment and experience necessary to handle complex print projects,” stated Garry Gunter, Contac’s General Manager of Print Operations, in the press release. “The acquisition of Forum’s printing equipment was exactly in line with our growth goals for 2010.”

Forum’s client list included such companies as Canada Post, the City of Vancouver, Tourism Richmond, Tourism Vancouver Island, Boston Pizza, Direct Buy, Canadian Cancer Society, and Vancouver Community College.

Contac, a privately held company, also lists facilities in Toronto, Montreal, Miami, Europe and Asia.



Quad/Graphics Inc., described as the largest privately held printer in the United States, announced today that its board of directors has unanimously approved a move to acquire Montreal-based World Color Press Inc.

If the acquisition is completed it would create one of the world’s largest printing companies, with the expanded Quad/Graphics employing nearly 30,000 people in the U.S., Canada, Latin America and Europe. World Color Press (Worldcolor) 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.  

The transaction is expected to close sometime in the summer of 2010. Quad/Graphics’ management estimates the integration of the two companies will result in US$225 million in savings within 24 months. Mark Angelson, currently the CEO of Worldcolor, is to stay on with Quad/Graphics as Chair of the Board Committee on Integration and Consolidation. Joel Quadracci will serve as Chairman, President and Chief Executive Officer of the expanded company.  

“Quad/Graphics has a long tradition of leadership and operational excellence.  I have the highest regard for Joel and his management team, whom I consider to be among the best and brightest executives anywhere,” stated Angelson, in a press release about the pending deal.


The acquisition, if completed, would represent the second huge M&A maneuver in the past decade by Mark Angelson, who in 2004 played a major roll in combining Moore Wallace with R.R. Donnelley to create the world’s largest printing company. 












Montréal-based Objectif Lune, which develops document-processing software, has acquired Edmond Document Solutions of The Netherlands. Much like Object Lune, Edmond Document is described as a developer of applications for the repurposing and enhancement of documents.

“We are confident this new partnership will allow both parties to speed up research and development, offer even more complete solutions and open very promising new markets,” said Didier Gombert, CEO of Objectif Lune.

Beyond Canada, Objectif Lune has offices in 10 other countries, including: The Netherlands, Australia, Colombia, France, Germany, Greece, Japan, South Africa, United Kingdom and the United States.




Belgium-based Agfa Graphics has completed the asset acquisition of Gandi Innovations Holdings LLC, which integrates technologies to build large-format inkjet devices.



The purchase involves most of Gandi’s North American assets, as well as shares in its principal foreign subsidiaries. In addition to a recently opened manufacturing facility in Mississauga, Gandi’s Website lists sales offices in Texas, Mexico City, India, South Africa, Belgium, Dubai UAE, and Hong Kong, with over 40 distributors worldwide.

The acquisition was announced in November 2009, six months after Gandi filed for bankruptcy protection in Canada, through the Companies' Creditors Arrangement Act, and in the United States, through Chapter 15.



Bloomberg.com reports this morning that Canon’s $1.1-billion bid for Océ NV “may 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.”

The Bloomberg article (link below) includes comments from a Canon spokesperson, as well as financial analysts who suggest it is not vital for Canon to obtain 100 percent of Océ’s shares at this time. 



The article also points out that the deal is fully supported by Océ executives. There are currently no counter bids on the table. Océ, yesterday, reported fourth quarter net loss of €23 million.

Read Bloomberg’s report







The sale of CanWest Global's newspaper holdings is set to begin later this week, despite strong objections from CEO Leonard Asper, who feels these assets are undervalued in the current economy.

CanWest Global has been operating under bankruptcy protection since October 2009, with RBC Dominion Securities acting as the company's financial advisor. RBC Dominion has found four potential suitors – Corus Entertainment, Shaw Communications, Fairfax Financial Holdings and Jim Pattison Group – to invest in the CanWest parent company, according to The Globe and Mail (see link below, along with two other related news links).

Each of these potential investors show varied interest in CanWest’s broad group of media assets. RBC has positioned the newspaper division to be sold separately. The Globe reported, that last week, CanWest CEO Leonard Asper wrote a letter in an attempt to stop creditors from putting CanWest’s 45 newspapers, as well as the National Post, up for sale.

While Asper feels the sale of the newspaper division is being rushed, and that a better price can be garnered when the economy improves, Grant Robertson of The Globe points out, “CanWest's newspaper division, known as CanWest LP, has fallen seven months behind on its debt payments. The bank has warned Mr. Asper that he now has no say over whether the assets are sold to recoup $935-million the senior lenders are owed.”

CanWest’s newspaper division owes creditors more than $1.3-billion. The auction for this division, and its 45 newspapers, is scheduled to begin this Friday. It will not include the National Post.


Read The Globe and Mail articles:


CanWest Draws four potential bidders

CanWest newspapers go on block despite CEO Asper's objections


CanWest lenders can't wait on sale, Scotiabank tells Asper



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