For someone who reads SEC filings for fun, the February 2 Schedule 14a (proxy statement) filed by Cadmus Communications Corp. was particularly interesting. The best part of filings like this is the "Background of the Merger" where we - the public - get to peak behind closed doors to find out what really happened during the negotiations and discussions that took place. On December 27, 2006, Cadmus announced that it had agreed to merge with Cenveo, Inc., and the Schedule 14a gives us the details that lead up to that announcement.

Lots of interest in Cadmus:

• During the first six months of 2005, Cadmus received a number of inquiries from strategic and financial parties interested in discussing potential transactions. In August 2005, the Cadmus board decided to conduct a formal process to evaluate potential interest in engaging in a transaction.


• By the end of September 2005, approximately 20 parties had been contacted. Of the parties contacted, 15 indicated interest and requested more information. Cenveo was not one of the parties who submitted an indication of interest.


• On October 17, 2005, Cadmus received non-binding initial indications of interest from four of the parties contacted by Deutsche Bank, Cadmus' investment banker.


• On October 19, 2005, Cadmus invited the four interested parties to participate in management presentations, visit selected facilities and operations and have access to an electronic data room, which included selected non-public information.

• On January 12, 2006, Cadmus met with representatives of Deutsche Bank and law firm Troutman Sanders to review the process and discuss their remaining strategic alternatives. Cadmus decided to discontinue the consideration of potential transactions with these interested parties.

• During the early summer of 2006, Robert G. Burton, Sr., Cenveo's CEO, called Bruce V. Thomas, Cadmus' CEO, and informally inquired whether Mr. Thomas was interested in discussing strategic alternatives with Cenveo. Mr. Thomas indicated to Mr. Burton that Cadmus was not prepared at that time to enter into discussions related to strategic alternatives with Cenveo. (Does that sound just a little bit familiar?)


• In August 2006, Cadmus decided to pursue a possible sale of the specialty packaging business. Wachovia Securities was retained.

• During Cenveo's review of the specialty packaging business, members of Cenveo's management indicated to representatives of Wachovia, that Cenveo would like to buy the entire company.


• On November 10, 2006, Mr. Thomas and Paul K. Suijk, Cadmus CFO, and representatives of Cenveo met to discuss a potential acquisition. (Note the timing here - just about 2 weeks after Donnelley snatched Banta away from Cenveo.)


• In response to Cenveo's interest in discussing the possibility of acquiring the entire company, on November 15, 2006, Cadmus entered into a confidentiality agreement with Cenveo.

• On November 30, 2006, members of Cenveo's management provided an oral indication to Mr. Thomas that Cenveo would be prepared to pay $22.00 per share in cash. Mr. Thomas requested that Cenveo confirm such proposal in a written offer.


• On December 1, 2006, Cenveo submitted a confidential, non-binding proposal to acquire all of the outstanding shares of the common stock for $22.00 per share in cash.


• On December 8, 2006, Cadmus' board of directors held a telephone conference call to discuss the Cenveo proposal. Cadmus decided to see if Cenveo was prepared to improve its proposal.


• Cenveo revised its offer to $23.50 per share. Cenveo also indicated that it was prepared to move quickly toward a definitive agreement, that its revised proposal included no financing condition, and that only confirmatory due diligence would be required.


• Later on December 9, 2006, and on the morning of December 10, 2006, Cadmus sent a counterproposal to Cenveo of $25.00 per share with no provision for employment agreements or shareholder voting agreements.


• On December 11, 2006, Cenveo revised its offer to $24.25 per share.


• Cenveo confirmed that it would not require employment contracts from any officer as a condition to entering into the agreement of merger. However, Cenveo would require voting agreements from key officers and directors who were significant shareholders.

Wrapped up in time for the New Year!