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Banta to Sell its Healthcare Products Business

Tuesday, February 15, 2005

Press release from the issuing company

MENASHA, Wis., Feb. 14 -- Banta Corporation today announced it has reached an agreement to sell substantially all of the assets of its single-use healthcare products subsidiary, Banta Healthcare Group, Ltd., to an affiliate of Fidelity Capital Investors, Inc., a private equity investment division of Boston-based Fidelity Strategic Investments. Banta Corporation will receive $67 million in cash in connection with the sale of Neenah, Wisconsin-based Banta Healthcare, a manufacturer and distributor of disposable medical and dental products. The transaction is expected to close toward the end of the first quarter of 2005, subject to customary closing conditions, including the receipt of financing and anti- trust clearance. In a separate transaction related to the divestiture of Banta Healthcare Group, Banta Corporation sold its warehouse in Rialto, CA, to a California real estate investment company for $7 million. Banta also announced today that its Board of Directors approved a $150 million share repurchase program, which replaces the corporation's existing program. The corporation expects to use the net cash proceeds from the sale of Banta Healthcare and the Rialto facility to repurchase its common stock in the open market, or in privately negotiated transactions, subject to market conditions. Banta Corporation Chairman, President and Chief Executive Officer Stephanie A. Streeter said the decision to sell Banta Healthcare reflects the priorities of the corporation's strategic plan, which emphasizes growth and development of its two primary businesses, printing services and supply-chain management services. "Maximizing value for our shareholders requires focusing our resources on our most important businesses," said Streeter. "With this sale, we are strengthening our ability to make meaningful advancements in our primary businesses, while providing Banta Healthcare with the opportunity for continued growth under new ownership." Streeter emphasized that, although Banta Healthcare has never had operational or market synergies with Banta's other divisions, it has always been a well-run operation and a solid contributor to Banta's earnings and cash flow. "Under new ownership eager to support the business by actively pursuing and investing in growth opportunities, Banta Healthcare has a bright future," Streeter said. "We wish the entire Healthcare team well, and thank its management and employees for their past hard work and dedication to the business." "Banta Healthcare is a market leader in the growing disposable medical and dental products industry," said David B. Wilson, managing director of Fidelity Capital Investors. "We look forward to partnering with the existing management team to further Banta Healthcare's growth." Robert W. Baird & Co. served as the financial advisor to Banta Corporation in connection with the sale of Banta Healthcare. In 2004, Banta Healthcare Group's revenue was $101 million and its contribution to the corporation's operating earnings was $10.6 million (approximately 27 cents per diluted share). As a result of the announced Healthcare Group sale, Banta Corporation has updated its financial guidance, which was issued in its fourth quarter earnings release dated January 25, 2005, to incorporate the expected results of the sale. With a continued favorable economic climate, Banta management believes that 2005 revenue can be in the range of $1.5 billion to $1.55 billion. Diluted earnings per share from continuing operations, including the effect of a continued reduction in the corporation's effective annual tax rate to 32 percent and the use of the net cash proceeds referenced above to repurchase shares, are now expected to be in the range of $2.80 to $2.95. In addition to results from continuing operations, 2005's net results will also include earnings from operations of the discontinued Healthcare segment through the date of closing and the capital gain from the sale of the business.




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