François Olivier, CEO of Transcontinental Inc., announced plans to acquire seven of Quad/Graphics’ facilities across Canada, while Transcontinental is also divesting its Mexican assets, consisting of three facilities.
It was one year ago, in early July 2010, when Wisconsin-based Quad/Graphics’ finalized its purchase of World Color Press, formerly Quebecor World, which held several printing facilities across Canada.
Among the seven Quad/Graphics facilities that Transcontinental is scheduled to pick up, by purchasing all the shares of Quad Graphics Canada Inc., three are in Ontario, two in Quebec and one each in Alberta and Nova Scotia – six printing plants and one pre-media facility. Collectively, these facilities employ 1,500 people and are forecasted to generate approximately US$310 million of revenues in fiscal 2011.
The three Mexican facilities that Transcontinental will drop, consisting of 900 employees, are forecasted to generate $67 million in revenues in fiscal 2011. Transcontinental also plans to transfer its black-and-white book printing business, destined for U.S. export, to Quad/Graphics. This book business represents approximately $25 million in revenues.
“The acquisition of the Canadian assets of Quad/Graphics is in line with our strategy to build on our more traditional print assets and is key to maintain a solid business going forward given the competitive and industry dynamics,” said Transcontinental President and CEO, François Olivier. “It will allow us to leverage the over $700 million in investments we have made to our printing platform over the last several years. These transactions combined will generate at least $40 million in net incremental EBITDA for Transcontinental, over 12 to 24 months following the closure of the transactions.”
The definitive agreement, subject to regulatory clearances, has been approved by the boards of both Transcontinental and Quad/Graphics, and is expected to be finalized in the Fall.
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