R. R. Donnelley & Sons Company (NASDAQ:RRD)
and
Consolidated Graphics, Inc. (NYSE:CGX) jointly
announced today that they have signed a definitive agreement by
which RR Donnelley will acquire Consolidated Graphics, a provider
of digital and commercial printing, fulfillment services, print
management and proprietary Internet-based technology solutions. The
agreement has been unanimously approved by each company's Board of
Directors.
Under the terms of the transaction, Consolidated Graphics
shareholders will receive a combination of $34.44 in cash and a
fixed exchange ratio of 1.651 RR Donnelley shares for each
outstanding share of Consolidated Graphics they own or $62 per
share based on RR Donnelley's closing share price on October 23rd.
This consideration represents a transaction value of approximately
$620 million, plus the assumption of Consolidated Graphics' net
debt.
The acquisition is expected to be both deleveraging and
accretive to RR Donnelley's non-GAAP earnings per
diluted share within 12 months following the closing of the
transaction, which is expected to occur in the first quarter of
2014. The completion of the transaction is subject to customary
closing conditions, including regulatory approval and approval of
Consolidated Graphics' shareholders. Simultaneously with signing
the definitive merger agreement, Consolidated Graphics' Chairman
and Chief Executive Officer, Joe R. Davis entered into a voting
agreement, under which he agreed to vote his shares in favor of the
approval of the merger agreement. Mr. Davis' shares currently
represent approximately 16.5% of Consolidated Graphics' outstanding
shares.
"Consolidated Graphics is an exceptional fit with RR Donnelley
and we are delighted to welcome them to our organization," said
Thomas J. Quinlan III, RR Donnelley's President and Chief Executive
Officer. "This strategic combination will complement the RR
Donnelley platform and further enhance our ability to provide
integrated communications solutions for our valued clients across
all industry verticals."
"Consolidated Graphics' success is due to our outstanding
employees and their ability to provide the service and
responsiveness of a local printing company while offering customers
the flexible solutions and competitive pricing available from our
wide network," stated Joe R. Davis, Consolidated Graphics' Chairman
and Chief Executive Officer. "Our customers will benefit
significantly from RR Donnelley's broad range of printing
capabilities and our combined geographic footprint. RR
Donnelley's customers will benefit from the planned adoption of
Consolidated Graphics' local service model for all of its
commercial printing group."
RR Donnelley will host a conference call and simultaneous
webcast to discuss the transaction today, October 24, at 8:00 a.m.
Central Time (9:00 a.m. Eastern Time). Individuals
wishing to participate must register in advance at
http://www.meetme.net/rrd. After registering, participants
will receive a dial-in number, a passcode, and a personal
identification number (PIN) that is used to uniquely identify their
presence and automatically join them into the audio conference. A
webcast replay will be archived on the Company's web site for 30
days after the call. In addition, a telephonic replay of the call
will be available for seven days at 630.652.3042, passcode
5278179#.
About RR Donnelley
RR Donnelley (NASDAQ:RRD) is a global provider of integrated
communications. The company works collaboratively with more than
60,000 customers worldwide to develop custom communications
solutions that reduce costs, drive top-line growth, enhance ROI and
increase compliance. Drawing on a range of proprietary and
commercially available digital and conventional technologies
deployed across four continents, the company employs a suite of
leading Internet-based capabilities and other resources to provide
premedia, printing, logistics and business process outsourcing
services to clients in virtually every private and public
sector.
For more information, and for RR Donnelley's Global Social
Responsibility Report, visit the company's web site
at http://www.rrdonnelley.com.
About Consolidated Graphics
Consolidated Graphics, Inc. (NYSE:CGX), headquartered in
Houston, Texas, is one of North America's leading general
commercial printing companies. With 70 printing businesses
strategically located across 26 states, Toronto, Prague, and Gero,
Japan, CGX offers a broad geographic footprint, leading-edge
capabilities, and high levels of convenience, efficiency and
service. With locations in or near virtually every major U.S.
population center, CGX provides the service and responsiveness of a
local printer enhanced by the economic, geographic and
technological advantages of a large national organization. For
more information, visit www.cgx.com.
Additional Information and Where To Find It
This news release relates to a proposed transaction between RR
Donnelley and Consolidated Graphics, which will become the subject
of a registration statement on Form S-4 and proxy
statement/prospectus forming a part thereof, to be filed with the
SEC by RR Donnelley and Consolidated Graphics. This document
is not a substitute for the registration statement and proxy
statement/prospectus that RR Donnelley and Consolidated Graphics
will file with the SEC or any other documents that RR Donnelley or
Consolidated Graphics may file with the SEC or send to shareholders
of Consolidated Graphics in connection with the proposed
transaction. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND
SECURITY HOLDERS OF CONSOLIDATED GRAPHICS ARE URGED TO READ THE
REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS AND ALL OTHER
RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED BY RR DONNELLEY OR
CONSOLIDATED GRAPHICS WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED
MATTERS. Investors and security holders will be able to obtain
free copies of the registration statement, the proxy
statement/prospectus (when available) and other relevant documents
filed or that will be filed by RR Donnelley or Consolidated
Graphics with the SEC through the website maintained by the SEC at
http://www.sec.gov. Copies of the registration statement,
proxy statement/prospectus and other relevant documents filed by RR
Donnelley with the SEC will be available free of charge on RR
Donnelley's internet website at http://investor.rrd.com/sec.cfm or
by contacting RR Donnelley's Investor Relations Department at (800)
742-4455. Copies of the proxy statement/prospectus and other
relevant documents filed by Consolidated Graphics with the SEC will
be available free of charge on Consolidated Graphics' internet
website at
http://investors.cgx.com/phoenix.zhtml?c=78535&p=irol-sec or by
contacting Consolidated Graphics' Investor Relations Department at
(713) 787-0977.
No Offer Or Solicitation
This news release does not constitute an offer to sell, or an
invitation to subscribe for, purchase or exchange, any securities
or the solicitation of any vote or approval in any jurisdiction,
nor shall there be any sale, issuance, exchange or transfer of the
securities referred to in this announcement in any jurisdiction in
contravention of applicable law.
Participants in the Solicitation
RR Donnelley, Consolidated Graphics, and their respective
directors and executive officers may be considered participants in
the solicitation of proxies from shareholders of Consolidated
Graphics in connection with the proposed transaction. Information
about the directors and executive officers of Consolidated Graphics
is set forth in its proxy statement for its 2013 annual meeting of
shareholders, which was filed with the SEC on July 9,
2013. Information about the directors and executive officers
of RR Donnelley is set forth in its proxy statement for its 2013
annual meeting of stockholders, which was filed with the SEC on
April 15, 2013. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement/prospectus and other
relevant materials to be filed with the SEC when they become
available.
Use of Forward-Looking Statements
This news release includes certain "forward-looking statements"
within the meaning of, and subject to the safe harbor created by,
Section 21E of the Securities Exchange Act of 1934, as amended,
with respect to the business, strategy and plans of RR Donnelley
and Consolidated Graphics, their expectations relating to the
proposed transaction and their future financial condition and
performance, including estimated synergies. Statements that are not
historical facts, including statements about RR Donnelley or
Consolidated Graphics managements' beliefs and expectations, are
forward-looking statements. Words such as "believes",
"anticipates", "estimates", "expects", "intends", "aims",
"potential", "will", "would", "could", "considered", "likely",
"estimate" and variations of these words and similar future or
conditional expressions are intended to identify forward-looking
statements but are not the exclusive means of identifying such
statements. While RR Donnelley and Consolidated Graphics believe
these expectations, assumptions, estimates and projections are
reasonable, such forward-looking statements are only predictions
and involve known and unknown risks and uncertainties, many of
which are beyond RR Donnelley's or Consolidated Graphics'
control. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend upon
future circumstances that may or may not occur. Actual results
may differ materially from RR Donnelley's and Consolidated
Graphics' current expectations depending upon a number of factors
affecting their businesses and risks associated with the successful
execution and integration of the proposed transaction and the
performance of their businesses following such
transaction. These factors include, among others, successful
completion of the proposed transaction, the ability to implement
plans for the integration of the proposed transaction, including
with respect to sales forces, cost containment, asset
rationalization and other key strategies and the ability to
recognize the anticipated synergies and benefits of the proposed
transaction, and the receipt of required regulatory approvals for
the proposed transaction (including the approval of antitrust
authorities necessary to complete the proposed transaction), and
such other risks and uncertainties detailed in RRD's and
Consolidated Graphics' periodic public filings with the SEC,
including but not limited to those discussed under "Risk Factors"
in RRD's Form 10-K for the fiscal year ended December 31, 2012
and in Consolidated Graphics' Form 10-K for the fiscal year ended
March 31, 2013, in RRD's and Consolidated Graphics' subsequent
filings with the SEC and in other investor communications of RRD
and Consolidated Graphics from time to time. RR Donnelley
and Consolidated Graphics do not undertake to and specifically
decline any obligation to publicly release the results of any
revisions to these forward-looking statements that may be made to
reflect future events or circumstances after the date of such
statement or to reflect the occurrence of anticipated or
unanticipated events.
CONTACT: RR Donnelley Contacts:
Media Contact:
Phyllis Burgee
Director Communications
Tel: +1 630-322-6093
E-mail: phyllis.burgee@rrd.com
Investor Contact:
Dave Gardella
Senior Vice President Finance
Tel: +1 312-326-8155
E-mail: david.a.gardella@rrd.com
Consolidated Graphics Contacts:
Media Contact:
Matt Steinberg/Christine Mohrmann
FTI Consulting, Inc.
+1-212-850-5600
Investor Contact:
Jon C. Biro
Executive Vice President/Chief Financial Officer
Consolidated Graphics, Inc.
+1-713-787-0977
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