Printing Company Quad Graphics Acquires LSC Communications in All-Stock Deal Worth $1.4 Billion

Quad Graphics Inc. (QUAD) will acquire LSC Communications (LKSD) in an all-stock transaction valued at $1.4 billion, including assumption of debt, the companies said in a joint statement Wednesday.

The companies said their boards have both approved the agreement. Combined, the new entity would have annual revenue of about $8 billion. Quad Graphics is a Sussex, Wisconsin-based printing company with facilities in the US, Canada, Europe and Latin America. LSC is a printing company that was formed as part of a spinoff from RR Donnelley in 2016.

Under the terms of the agreement, LSC stakeholders for each share they own will receive 0.625 share of Quad Class A common stock. That represents about 29% of total ownership in the combined company and about 11% of voting power.

Quad Graphics said it expects the deal to be accretive to earnings excluding one-time integration costs, while synergies are forecast around $135 million and will be realized in less than two years. Clients will benefit from greater efficiencies in supply chain management, the statement said.

The deal creates a “highly efficient” printing platform, delivers cost- and time-saving opportunities for clients, expands logistics services and volume-driven postage savings and strengthens print management services and process outsourcing, the companies said.

Joel Quadracci will be chairman, president and chief executive of the combined company. Quad will expand its board of directors to include two members from LSC’s existing board. The deal is expected to close in mid-2019, the statement said.

“(The acquisition) results in a more profitable company with a strong and healthy balance sheet that provides continued financial flexibility to strategically deploy capital between investing back into the business, making strategic acquisitions and returning capital to shareholders through consistent dividends and share repurchases,” the companies said.