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."
|John Parker says:|