Quad/Graphics announced today the intent to acquire Worldcolor formerly known as Quebecor World, before that company filed for bankruptcy in January 2008.
Joel Quadracci, 41, will serve as Chairman, President and Chief Executive Officer of the expanded company. The future Board will be comprised of the six current Quad/Graphics directors and two Worldcolor directors: Mark Angelson, who will Chair the Board Committee on Integration and Consolidation, and a director to be named prior to closing.
The combined companies will rival RR Donnelley in revenues. Quad/Graphics is the largest privately held printer in the U.S., and Worldcolor is the second largest provider of print, digital and related services in the Americas.
We will be following the investor conference call today and will post a follow up here on Print CEO.
Discussion
By Michael J on Jan 26, 2010
Wow. If Quad can keep the dna that has made them great, I have a feeling lots of folks at Donnelly are having a busy morning.
By guy rochford on Jan 26, 2010
I print with all three vendors and I can say that the thing that I always viewed as an advantage at Quad may become one of their bigger challenges. That is the "greenfield" concept. Any Quad plant you walk into feels like the others and generally, the interaction for the customer is a constant. Wether it's Saratoga or Sussex or Oklahoma the physical environment feels familiar. You also will get the same invoicing, the same inventory and standardized communication. The RRD and World acquisition model results in a splintered experience from plant to plant and that makes one's life more complex. It's not a deal breaker but if you have experienced both, you will prefer the homogenized experience.
So, can Quad overcome this when the others have struggled in their attempts at standardization? I can only tell you I witnessed them take their Polish affiliate, Winkowski, and inject the Quad DNA. They transformed that operation into a modern, very Quad like printer and (more importantly) a European mailer. And they're all dressed in blue.
By russ on Jan 26, 2010
This is really interesting. Quad will finally be a real competitor in this market, and they've been trying to gain a foothold for a while; now they have the tools to really compete, and take a lot of business away from #1. Being private should give them a leg up also as they don't compete with Wallstreet or answer to the shareholders.
By Cary Sherburne on Jan 26, 2010
Yes, but they won't be private. They will be listed on an as-yet unnamed US stock exchange after the deal is closed this summer
By Greg Imhoff on Jan 26, 2010
Could it be in this era of rampant downsizing and industry consolidations one single major merger may actually make sense or be applauded?
With talented persons in each company I know as Guy states the new parent has a track record of successfully transferring one healthy culture and DNA.
As a business man visiting many types of printers this merger seems on the surface to bode well.
By Clint Bolte on Jan 26, 2010
I find it interesting that from my observation there has never been a substantial printing company that values its culture more than Quad. Thirty years ago Quad's Bean (Atlanta) acquisition was reported to be not faring well because of this culture incompatibility issue.
Keep in mind that there exists no corporate printer on this globe that is more technology driven than Quad Graphics as evidenced by their own enhancements of leading equipment and reselling via QuadTech.
WorldColor, on the other hand, did not reinvest in decent technology much less their own patented enhancements for decades. Only recently have they tried to leap frog generations of technology by purchasing some new roland webs.
This lack of innovation and technology awareness by WorldColor's journeyman operators and entire management team will be an extremely difficult cultural characteristic to correct.
This deal may be exciting from the merged balance sheet and even marketing perspectives. However, Quad's operations team has never ever had this kind of a challenge to boot strap a printer of this size before.
I'm not trying to suggest that WorldColor does not have good equipment operators or operational management team. They simply, for much of their entire careers, have never been given leading edge tools and resources to use. This is second nature to the Quad DNA.
Perhaps this analogy is inappropriate and unfair, but I recall vividly at DRUPA 90 when my German printer clients were discussing how they were going to bootstrap their East German printer relatives (many were literally family enterprises before WWII) as the result of the wall coming down only months earlier in 1989. While the work ethic and intelligence of the East Germans was never at issue, the upgrades (40 years worth) and bootstrapping took nearly two decades for the Eastern block firms to reach parity.
It will be exciting to see. And the whole industry wishes them well in the process.
By Malone on Jan 27, 2010
If it's true this new enterprise will be a public company, it will be really interesting if QG can retain any of its culture and gimmicks once shareholders start poking around.
By john Smith on Jan 27, 2010
Is not the logical question how much WC apacity will come off the table as opposed to a transfer of DNA. The steady decline in the publication segment has left Quad plants underutilaized, I believe the work will be shifted to Quad plants and the "synergies" stated in yesterday's conference call are really cost reductions from downsizing the WC platform and maximizing the capacity in the Quad plants. This could be a "blood bath" for the WC side of the equation as opposed to a DNA transfer
By Cary Sherburne on Jan 27, 2010
That is certainly a possibility, considering WC's lack of focus on its technology platform over the last few years. Angelson was unwilling to be more specific about the "synergies" during the call, tho he did start off the call by saying something about "most of the Worldcolor staff will be joining ..." Yet you cannot argue with the decline in volumes this segment has seen and the need to consolidate infrastructure, ensuring that it is modern and up to date.
By Glen Ketchian on Jan 27, 2010
Quad is going to benefit from an ability to offer an increased product offering of books and direct mail. I agree with John Smith that Quad will take the pub and catalog products and place them in their own plants which have idle presses. WC is in for a tough time in those facilities.
Like Guy mentioned, WC is not consistant in production/customer service/billing/quality. Their managment is also constantly changing and no one takes responsibility.
Many of the sales reps at WC are or becoming salary so they might finally welcome Quads pro employee stance, if they are kept. The commissioned reps are going to have a tougher time working out the kinks...but options are limited as we all know.
They might not be a monopoloy but they are sure making it tough for those of us that need a good supply of large run printers. The pool is very small now.
Next step, once suppliers are limited they will shut down equipment and raise prices. This might be a while but it is coming. Printers can't run in the red forever.
By David on Jan 27, 2010
Quad will be going public (as stated in the news release). I believe this will be problematic for them as they will be driven by Wall Street and what they can provide to their Stock holders. The customers will now become their second concern.
They should stay provate. It will give them a more competitive edge.
By Tranny Annie on Jan 27, 2010
Ladies and Gentlemen lets please all be realistic here. RR Donnelly always has been, and I have no doubt the leader in this industry. With their ever expanding market share, and the continuous innovation no other company can even come close to touching them.
By Michael J on Jan 27, 2010
Don't know enough about either Quad or Donnelly, but based on my limited experience from years ago, Donnelly dna is optimized for another global.
From the conversation here and what I've scanned in the press, it seems Quad is a different outfit.
To be fair I worked with RRD about 10 years ago and RRD is in my IRA. But, as the globals are under stress, if they still have the same "we don't really need you, we're Donnelly" attitude
Given that new growth opps in the marketplace are with thousand of niche publications, it will be interesting to see how Donnelly adapts.
By Ron on Jan 27, 2010
When Quebecor merged with (bought) World Color, they were two top heavy companies that became one VERY dis-jointed, middle management heavy, behemoth that was frankly destined to fail because the groundwork to join the two was not properly done.
They made some BAD decisions, upset some GOOD customers, and failed to invest wisely in their people and technology.
If Quad can obliterate the many un-needed levels of management at WC and profitably take over their contracts, they may indeed be able to rival RRD.
As was already stated, RRD will likely move much of the WC work to it's own facilities and idle the WC plants. It would be REALLY bad judgement for them to not do this.
It's too bad for any remaining QW employees.
Remember what happened to the TWA folks after they "merged" with American Airlines?
By Chuck on Jan 28, 2010
This is the best possible outcome, and it's going to be exciting to see what Quad becomes. There is near perfect competition in the printing industry, and this won't change that.
By Bob on Jan 28, 2010
in response to david's comment. Going public for Quad will not be a problem since the Quadracci Family will control 78% of the voting stock and will maintain the vision as it always has been.
By JR on Feb 09, 2010
Mark Angleson never provided integration to the Moore and Wallace merge, not the RRD Moore merge. Quebecor and World never really managed a merge, so I dont expect that anything improved will come of Quad / World merge. Bigger company, merge = cuts and downsizing so numbers look better. Joel Q. would have a huge undertaking to right that ship.