SUSSEX, Wis.--Aug. 9, 2004-- Quad/Graphics today announced an agreement to sell its Parcel Direct division to FedEx for $120 million, payable in cash. The transaction is expected to close as soon as possible after appropriate regulatory and legal conditions have been met. "In six years, we have grown Parcel Direct from a tiny upstart into a leading parcel expeditor and now we are pleased that a premier company like FedEx will build on our record of growth," said Thomas A. Quadracci, President & CEO of Quad/Graphics. "Our companies share similar business values, especially our commitment to customer and employee care. We have full confidence in FedEx as a growth-oriented business and top-level employer." Parcel Direct has built a profitable business by specializing in the consolidation and delivery of high volumes of lower-weight, less time-sensitive packages. Its unique business model capitalizes on the efficiencies of automated equipment and processes to expedite packages from businesses to consumers in two to six days using the U.S. Postal Service for in-home delivery. Parcel Direct employs approximately 450 employees from 12 distribution centers coast to coast and generated $250 million in sales in 2003. Quad/Graphics is selling Parcel Direct in the long-term best interest of Parcel Direct customers and employees. Marketplace dynamics have changed in the last year with a number of shippers preferring to contract with a single source for all their delivery needs. To date, Parcel Direct has been successful in serving a specific niche. However, it is only one solution, and today's marketplace is all about choice, Mr. Quadracci explained. "In the interest of continuing to serve our customers and employees, it makes sense to sell Parcel Direct to FedEx, which can incorporate the business into an industry-leading lineup of delivery services," he said. The sale has no effect on Quad/Graphics' commercial printing operations or its print distribution services (provided through its Quad/Transportation Services division). The printer will continue to focus on advancing its ink-on-paper services through the industry's most modern printing and distribution platform. In May, Quad/Graphics announced its purchase of $200 million of new press and finishing equipment to further bolster the advantages of its printing platform, and to assume additional work from new and existing clients. "Quad/Graphics is in growth mode as always," Mr. Quadracci said. "We are expanding our facilities and our equipment base to offer the broadest range of services to keep our clients competitive."