Sussex-based Quad/Graphics Inc. has agreed to acquire Waseca, Minn.-based Brown Printing Co. for $100 million.
The transaction is subject to regulatory approval, and is expected to close in the second half of the year.
Brown provides printing, distribution and integrated media solutions to the premier publishing and catalog industries.
Quad plans to make a $300 million private offering of senior notes and extend its senior secured credit facility by $1.6 billion to fund the transaction. The facility will include a five-year, $850 million revolving credit line, a five-year, $450 million bank term loan A and a seven-year, $300 million term loan B.
The proceeds of the offering and extension will be used to repay existing term debts, for general corporate purposes and to fund the acquisition.
Brown expects about $350 million in revenues for 2014, and Quad expects the acquisition will be accretive to earnings and provide synergies in operations. The company reaffirmed its earnings guidance for 2014, which calls for revenue of $4.6 billion to $4.8 billion.
Brown has about 1,800 employees. Quad/Graphics has about 25,000 employees worldwide. The company declined to comment on transition plans until the acquisition is finalized.
“This acquisition is consistent with our ongoing strategy to transform Quad/Graphics and create value for our clients and shareholders,” said Joel Quadracci, Quad/Graphics chairman, president and chief executive officer. “Brown is a well-respected, financially strong company focused on delivering superior quality and impeccable customer service to a diverse range of clients. This acquisition will enhance the many ways we help publishers and marketers drive top-line revenues while better controlling their overall total cost of production and distribution. With print as our foundation, we will continue to find innovative ways to connect and integrate print with other media channels to increase reach, response and return on investment. We are excited by the opportunities ahead and look forward to welcoming Brown’s clients and employees into our family.”
“Brown has prospered under the ownership of Gruner + Jahr and its shareholders for the past 35 years. Their strong financial support along with Brown’s talented and dedicated employees has fueled our growth,” said Mike Amundson, president and CEO of Brown Printing Co. “Looking forward, we are excited about this acquisition as it will benefit our clients through the expanded depth of the combined platform. In addition, Brown and Quad/Graphics are united by a common culture based on a passion for innovating and providing the highest quality products and client experience in the industry. I am convinced that Quad/Graphics is the best owner for the future of Brown.”
Foley & Lardner LLP advised Quad in the transaction.
