Quad/Graphics hopes for transformation through $260M Courier deal
In its quest to run a publishing business based on a “zero-inventory model” that prints products on demand, Wisconsin-based printing giant Quad/Graphics Inc. plans to scoop up Chelmsford-based book manufacturer Courier Corp.
Courier, according to Quad/Graphics President and CEO Joel Quadracci, “has a legacy of superior quality and exceptional customer service, and is a well-known innovator in every aspect of book production.”
Quadracci’s comments were made in a company statement Jan. 16, when Quad/Graphics announced plans to acquire Courier in a deal valued at $260 million.
Courier an 'early adopter' in digital print
The acquisition has been approved by both companies’ boards of directors, Quad/Graphics said, and is expected to close by the middle of this year, pending regulatory approval. Courier shareholders will be paid $20.50 per share in cash and shares of Quad/Graphics stock, according to the company.
Quad/Graphics views Courier, which employs 1,500 and posted annual revenue of about $275 million in its 2013 fiscal year, as an “early adopter” of digital print technology, according to the statement. Founded in 1824, Quadracci said it has stayed ahead of the curve.
“Using digital technology, Courier pioneered the development of customization solutions that bring class-specific versions of academic textbooks to millions of students each year,” Quadracci said. He went on to explain that the Courier purchase complements Quad/Graphics’ recent investment in at least 20 digital presses designed to print custom content in low inventories.
Now, the company is poised to “accelerate a broad industry transition to a print-on-demand, zero-inventory model,” Quadracci said. It’s part of a three-year strategy Quad/Graphics announced just two days earlier, along with the purchase of the new digital presses, to transform its book platform to give book publishers are larger range of printing options.
“Our digital press solution will help redefine the entire book supply chain, giving publishers increased customization … faster time-to-market, reduced waste … and lower fixed costs,” Quadracci said.
Acquisition spree continues
The Courier deal is the latest in a spree of acquisitions for Quad/Graphics in recent years. The Milwaukee Journal Sentinel reported that the company, a leading printer of magazines and catalogues, has been “remaking itself through a rapid-fire succession of nine acquisitions since 2010.”
Courier officials did not respond to a request for comment on the deal by deadline. But in the same company statement, Chairman and CEO James F. Conway said “the board determined that the transaction with Quad/Graphics maximizes value” for shareholders and holds promise for the company.
“We are confident that the combination of our two companies will create the most opportunities for customers and employees well into the future,” Conway said.
Courier stock spikes on news of deal
Indeed, the news was well received by shareholders. After closing at $14.42 per share on Thursday, Jan. 15, Courier’s stock price shot up to $19.93 by the market close Friday—a 52-week high--and has dropped off just slightly to the mid-$19 range.
But exactly how the future will look for Courier’s Chelmsford operations is unclear, as company officials from both sides have declined to discuss how operations will be impacted while the deal is pending.
“At this point, we have only just announced our intent to acquire Courier,” Quad/Graphics spokeswoman Claire Ho said in an e-mail. “The transaction must pass regulatory approval and the approval of Courier's shareholders. Any integration-related questions, including any information about post-close operations, will be shared after the transaction is completed.”
Courier said it published 175 million books last year, making it the nation’s second-largest book manufacturer. In addition to making books, Courier provides content management, self-publishing, and digital and print distribution services to the education, religious and trade sectors, according to the company website. Its headquarters are located on Wellman Avenue in North Chelmsford.
Image source: Freedigitalphotos.net
WBJ Web Partners
Most Recent
Most Recent
0 Comments