Atlas Holdings to Take North American Printing Leader RR Donnelley Private in $2.1B All-Cash Deal

Foreign media reports indicate that Atlas Holdings will acquire RR Donnelley in an all-cash transaction valued at about $2.1 billion, taking the company private.

On November 3, US time, RR Donnelley’s board unanimously approved the final merger agreement.

The acquisition is expected to close in the first half of 2022, subject to approval by RR Donnelley shareholders and regulators. Once completed, RRD shares will no longer be listed on the New York Stock Exchange, and the company will become privately held.

A high-premium deal

Under the deal terms, Connecticut-based Atlas Holdings, headquartered in Greenwich, will acquire all outstanding shares of RR Donnelley common stock, with shareholders receiving $8.52 in cash per common share.

The purchase price represents a premium of about 29.1% to RR Donnelley’s November 2 closing price and about 72.8% to its October 11 closing price.

For the period ended October 11, 2021, the price was also about 64.1% above RR Donnelley’s 60-day volume-weighted average price.

RR Donnelley had previously turned down a higher-premium offer

John Pope, chairman of RR Donnelley’s board, said: “After careful and thorough analysis, the RR Donnelley board believes this transaction, which delivers an immediate premium and certain cash value, is in the best interests of RR Donnelley and our shareholders. We look forward to working with Atlas to complete this value-enhancing transaction.”

Dan Knotts, president and CEO of RR Donnelley, added: “Today’s announcement represents an exciting next chapter in the RR Donnelley journey. This transaction is a true testament to our outstanding employees, whose passion and dedication to serving customers have helped build the company into the industry-leading marketing and business communications company it is today.”

Dan Knotts also said: “Under our new ownership structure, they will gain more career development opportunities in the future.”

Earlier that day, before Atlas Holdings announced its acquisition, Chatham Asset Management, RR Donnelley’s largest investor, had raised its offer for the remaining shares from $9 in cash per share to $9.50, above its October offer of $7.50 in cash per share.

Atlas Holdings, with annual revenue of $10 billion, previously acquired LSC Communications

Atlas Holdings was founded in 2002 by Tim Fazio and Andrew Bursky. Initially, they acquired a small paper mill in Indiana and employed 85 people.

Today, the company and its affiliates own and operate 23 platform companies, employing about 40,000 people at more than 250 facilities worldwide and generating about $10 billion in annual revenue.

RR Donnelley was created in 2016 through a three-way split of the “old” RR Donnelley group, with LSC Communications and Donnelley Financial Solutions separated into standalone entities.

LSC Communications was acquired by Atlas Holdings in 2020. The US-based printing company, with turnover of $3.3 billion, entered bankruptcy protection in the spring of 2020. Perhaps it was this acquisition that made Atlas Holdings determined to acquire RR Donnelley.

In Printing Impressions magazine’s 2020 “Printing Impressions 350” ranking of North American printing companies, RR Donnelley ranked first with $5.5 billion in sales revenue, down 3% year on year, while LSC Communications ranked third with $2.845 billion in sales revenue, down 22% year on year.

Fazio, co-founder and managing partner of Atlas, said: “Atlas is a trusted partner to companies that have a strong track record of innovation and customer service, as well as clear opportunities for continued growth.”

“That is exactly what we see in RR Donnelley. We look forward to working with RR Donnelley’s talented and experienced team, and we welcome our RR Donnelley colleagues to the Atlas family.”

RR Donnelley said that, under the merger agreement, it may solicit additional acquisition proposals from third parties within 25 days after the agreement is signed.

Buoyed by the positive news, RR Donnelley’s stock rose nearly 40%

RR Donnelley also reported its third-quarter financial results. The results showed that RR Donnelley’s net sales for the third quarter of fiscal 2020 increased 6.4% to $1.27 billion.

Before the COVID-19 pandemic, RR Donnelley had adopted a so-called “poison pill” plan designed to prevent anyone from gaining “undue influence or control” over the company without board approval.

Before trading began on November 3, RR Donnelley shares rose nearly 40% to $9.23.

—This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-378611.html