Log In | Become a Member | Contact Us

Leading printing executives into the future

Connect on Twitter | Facebook | LinkedIn

Featured:     European Coverage     Production Inkjet Analysis

Moore and Wallace to Merge in $1.3 Billion Deal

Monday, January 20, 2003

Press release from the issuing company

LISLE, Ill. & MISSISSAUGA, Ontario & STAMFORD, Conn.--Jan. 17, 2003-- Moore Corporation Limited and Wallace Computer Services, Inc. today announced the signing of a definitive merger agreement to form one of the largest providers of print management solutions in the world. The combined company, to be named Moore Wallace, would become one of the world's largest integrated providers of commercial print, direct mail, outsourced customer communications, forms, labels, fulfillment and distribution services. At yesterday's closing price of US$10.65, Moore will pay aggregate consideration of approximately US$1.3 billion consisting of approximately US$606 million in cash, approximately US$470 million in Moore's common shares, and the assumption of approximately US$210 million in debt. Wallace shareholders will be given the opportunity to elect to receive either cash or shares. The amount requested by Wallace shareholders will be subject to proration so that on average each Wallace shareholder will receive US$14.40 in cash and 1.05 shares of Moore for each share of Wallace. At yesterday's closing price of Moore, the transaction is valued at US$25.58 for each share of Wallace. The transaction is intended to qualify under certain circumstances as a tax-free reorganization for U.S. federal income tax purposes, although there can be no assurance that this will be the case and such qualification is not a condition to closing. If it does qualify as a tax-free reorganization, Wallace shareholders who receive only common shares in the reorganization generally should not recognize gain for U.S. federal income tax purposes. To complete the transaction, Moore will issue approximately 44.2 million common shares to Wallace shareholders, who, following the merger, will own approximately 28 percent of the combined company. Moore expects to finance the cash portion of the transaction from cash-on-hand and committed financing from a group of banks led by Citigroup/Salomon Smith Barney Inc., Deutsche Bank AGDeutsche Bank Securities Inc. and Morgan Stanley. The merger was unanimously approved by both Boards of Directors and is subject to customary conditions, including among other things, approval by Wallace shareholders and regulatory approvals. When the merger is completed, the company will have approximately US$3.6 billion in annual revenues and over 18,500 employees worldwide. The merger is expected to be immediately accretive to earnings, excluding merger related expenses upon closing of the transaction. The company expects to generate synergy savings of at least US$50 million on an annualized basis from asset rationalization, elimination of redundant overhead and duplicate IT expenditures, procurement savings and the opportunity to leverage a more comprehensive product offering to its broader customer base. The combined company is expected to generate substantial free cash flow in the first year of consolidated operations. "This is truly an historic merger between two great companies," said Mark A. Angelson, Chief Executive Officer of Moore. "We are creating a world leader in the printing industry with a strong customer base and a diversified manufacturing platform from which to grow our business. Together we will provide an unparalleled set of print management solutions for our customers. This combination will be impressively accretive to shareholder value and will combine the most talented workforces in the industry." Mr. Angelson will be Chief Executive Officer of the combined company. At the time of the merger, three of Wallace's directors will be offered positions on the Moore Wallace board. M. David Jones, Wallace's chairman and chief executive officer said, "This merger will combine the proven strengths of two powerful organizations. Our new company will provide customers with the most innovative and cost effective solutions for all of their printing needs. We will clearly be the industry leader. Customers and shareholders will be well served by this merger." Alfred C. Eckert III, Chairman of Moore's Board, stated: "I am enthusiastic about this transaction and the opportunities that it creates to enhance shareholder value. The combination strengthens our platform and affords us an excellent base from which to grow our business." Morgan Stanley provided mergers and acquisitions advice to Moore, and Sullivan & Cromwell LLP acted as legal advisor. Dresdner Kleinwort Wasserstein provided mergers and acquisitions advice to Wallace, and Sidley Austin Brown & Wood acted as legal advisor. ------- Editor's Note for Premium Access Members at WTT: Susan Kelly of Raine Consulting listened to the conference call between Moore and Wallace executives and financial analysts. Her summary of the call published within “Raine Radar” is located at www.whattheythink.com. Dr. Joe Webb has also provided a brief take on this news. His comments can be found at www.whattheythink.com.




Email Icon Email

Print Icon Print

Become a Member

Join the thousands of printing executives who are already part of the WhatTheyThink Community.

Copyright © 2016 WhatTheyThink. All Rights Reserved