R. R. Donnelley beats Quad/Graphics in battle for US book printer

Despite having signed a definitive agreement with the board of Courier Corporation, Quad/Graphics was beaten to the punch by the largest printer in the word. Quad/Graphics will get a consolation prize in the form of a $10 million termination fee as it declines to take part in a bidding war against its larger rival.

RR Donnelly gazumped the original offer of $20.50 per share with an unsolicited offer of $23.00 per share, which values Courier at $261 million.

According to Joel Quadracci, Chairman, President & CEO of Quad/Graphics, the company maintains a disciplined approach to spending. "We continue to believe our offer to Courier was compelling and would have provided significant value for all of Quad/Graphics and Courier stakeholders, including shareholders, employees and customers in the book market over the long term," he said.  "However, when it comes to spending our capital, we maintain a disciplined approach and, therefore, did not submit a revised offer. We are always careful to consider the impacts of our decisions against our priorities to pay down debt and pension liabilities, invest in our business, pursue future growth opportunities and return value to our shareholders."

Courier Corporation is a leader in digital printing, publishing and content management in the United States specializing in educational, religious and trade books. According to Thomas Quinlan III, RR Donnelley's President and CEO the buyout represents the next chapter in two long-running success stories. "Our two organizations have a longstanding history of offering industry-leading solutions to our customers. We look forward to working with Jim Conway and his team in continuing that tradition."

Quad/Graphics is continuing with its investment in 20-plus high-speed HP colour digital web presses and integrated systems. By mid-June, the company will have five such presses in its platform with yet another to be installed before year's end. The technology gives book publishers new abilities to print books on demand and bring the promise of zero inventory and just-in-time delivery closer to reality.

"Our focus remains on transforming our book platform through the rapid implementation of digital press technology that will give publishers increased customization and versioning capabilities; faster time-to-market; reduced waste, inventories and obsolescence; and lower fixed costs," Quadracci said. "This is an exciting time for our Company as we take aggressive steps to change the face of the industry. Our digital printing transformation strategy will bring unique benefits to our clients, and allow us to gain additional market share and grow the book segment of our business."