Sussex-based Quad/Graphics Inc. paid $8.7 million in cash to gain a majority interest in Chicago-based digital marketing agency Rise Interactive in March.
The company disclosed the details of the March 14 transaction in a recent SEC filing.
The commercial printing and integrated marketing firm has had a non-controlling interest in Rise since July 2016, when it invested $12 million in the company. In this new transaction, Quad increased its equity position from 19 percent to 57 percent for $8.7 million in cash, plus the conversion of $9.3 million of loans to equity ownership.
Quad estimates the preliminary fair value of its assets and liabilities of Rise, plus its non-controlling interests in Rise, to be $60 million.
Rise focuses on digital media, analytics and customer experience for Fortune 500 brands. At that time, the plan was for Rise and Quad’s BlueSoho integrated marketing division to “co-innovate.”
With this latest transaction, Quad expects to “accelerate” its transition into an integrated marketing platform and complement its recent $92.5 million acquisition of marketing services provider Ivie & Associates.
Also this week, Quad/Graphics reported its first quarter results. The company recorded a $3.5 million net loss, or 7 cents lost per share, compared with net income of $25.4 million in the first quarter of 2017. Revenue was $967.5 million in the first quarter, down from $998.6 million in the year-ago quarter. Operating income was $7.1 million, down from $51 million, driven by lower net sales and a sharp increase in restructuring, impairment and transaction-related charges.
“Our results for the first quarter of 2018 were in-line with our expectations as we continue to transform our company as part of Quad 3.0,” said Joel Quadracci, Quad/Graphics chairman, president and chief executive officer, about the results. “As a marketing solutions provider, we address our clients’ marketing challenges and solve their unique problems through a comprehensive offering. Our recent acquisition of Ivie & Associates and additional investment in Rise Interactive continue to accelerate our transformation, creating a powerful integrated marketing platform.”
