The all-cash deal is valued at approximately US$1.3bn, or $36.50 per share after a special dividend of $16 per share already declared by Banta.
The agreement has been unanimously approved by the boards of both companies and is expected to close in the first quarter of 2007.
The acquisition is expected to be accretive to RR Donnelley’s earnings in the first full year after the closing of the transaction and is subject to customary closing conditions, including regulatory approval and approval of Banta shareholders.
The combination will enable RR Donnelley to expand the range of products and services it offers customers, while at the same time enhancing its services to the magazine, catalogue, book and direct marketing segments.
Banta, with operations in the United States, Europe and Asia, will significantly enhance RR Donnelley’s geographic footprint and create opportunities for additional scale in locations where RR Donnelley is already present.
Headquartered in Menasha, Wisconsin, Banta has annual revenues of around US$1.5bn and provides comprehensive printing and digital imaging solutions to publishers and direct marketers, including advanced digital content management and e-business services. The company also provides a wide range of procurement management and other outsourcing capabilities to the world’s largest technology companies.
“Banta is an exceptional fit with RR Donnelley,” says Mark A. Angelson, RR Donnelley’s CEO. “This combination will create immediate cross-selling opportunities with our blue-chip customers as well as offer substantial synergies in our procurement, manufacturing and services operations.
“We are delighted to have the opportunity to better serve our customers by expanding the flexibility of our combined global manufacturing and service platforms. The addition of Banta furthers our goal of increasing long-term shareholder value and we look forward to maximising the benefits for our customers, employees and investors.”
Commenting on the transaction, Banta Chairman and CEO, Stephanie A. Streeter, says, “RR Donnelley’s innovative, customer-centered approach, broad product and service mix and emphasis on developing value-added solutions mirrors Banta’s. Joining these two highly successful, complementary companies will result in a combined organisation that creates new and exciting opportunities for our customers and employees moving forward.
“Together, the companies will offer enhanced capabilities and an increased array of options to our customers and I look forward to working closely with RR Donnelley’s management to ensure a smooth transition.”
John Paloian, RR Donnelley group president, Publishing & Retail Services, adds, “Our publishing, catalogue and direct marketing customers, in particular, will benefit from combined resources that will allow us to craft even more innovative and responsive solutions. From digital prepress capabilities through sophisticated logistics, our enhanced flexibility will allow us to address our customers’ needs more quickly for cost-effective and compelling communications.”
Founded more than 140 years ago, RR Donnelley provides solutions in commercial printing, direct mail, financial printing, print fulfillment, forms and labels, logistics, call centres, transactional print-and-mail, print management, online services, digital photography, colour services, and content and database management to customers in the publishing, healthcare, advertising, retail, technology, financial services and many other industries.
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