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Cenveo Announces Agreement to sell its Packaging Business to WestRock

Monday, December 14, 2015

Press release from the issuing company

STAMFORD, CT – Cenveo, Inc. (NYSE: CVO) (the “Company”) today announced that its wholly-owned subsidiary, Cenveo Corporation, and certain of its other subsidiaries have entered into a definitive agreement to sell the Company’s packaging business to a division of WestRock Company (“WestRock”), a leading provider of paper and packaging solutions in consumer and corrugated markets globally. The sale involves six facilities located in the U.S., Canada and Dominican Republic along with strategic sourcing partnerships in Asia and the Caribbean that provide folded carton, shrink sleeve and lithographic laminated display packaging solutions (“Packaging Business”).

Robert G. Burton, Sr., Chairman and Chief Executive Officer stated:

“The agreement brings conclusion to the review process of our Packaging Business which we started in the summer of 2015. The sale allows the Company to focus management’s efforts on its core operations, specifically our envelopes, labels, and commercial print segments where we hold leading market positions. The transaction will generate significant cash for the Company, an important step in our stated plan to deleverage our balance sheet, improve cash flows, and address certain debt maturities. Additionally, the agreement is expected to provide the Company access to one of the leading global packaging companies in the United States via a proposed commercial arrangement.”

The cash purchase price for the Packaging Business is approximately $105 million, subject to certain adjustments set forth in the agreement. The transaction is subject to regulatory approval and is expected to close in early 2016.

Barclays acted as exclusive financial advisor and Hughes Hubbard & Reed acted as legal advisor to the Company. 

 

Discussion

By Patrick Henry on Dec 14, 2015

It's an interesting counterpoint to the assumption that because packaging is "recession proof," commercial printers must want to break into it. Here, Cenveo apparently is doing just the opposite. And while $105 million in cash is a lot of money, it seems a bargain price for a packaging business consisting of six facilities that can do folding cartons, shrink sleeves, and laminated displays.

 

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Label & Packaging Editor

Jennifer Matt

Patrick Henry, Section Editor
Pat has covered graphic communications for nearly 30 years as a reporter, an editor, and a commentator.

 

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