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Schawk Acquires Seven Worldwide

Press release from the issuing company

DES PLAINES, Ill.--Dec. 20, 2004-- Schawk, Inc., one of North America's leading providers of digital imaging graphics services to the consumer products and brand imaging markets, today announced it has entered into a definitive agreement to acquire Seven Worldwide, Inc., formerly known as Applied Graphics Technologies, Inc. (AGT). Seven Worldwide provides industry-specific marketing execution and publishing solutions to clients in the consumer goods, retail, advertising, entertainment and publishing markets on a global basis. Headquartered in New York, Seven Worldwide serves clients from offices in North America, Europe, Australia and Asia. Based on Schawk's and Seven Worldwide's current 2004 forecast, the revenues of the combined businesses would be $630 million. Over its 40-year history, Seven Worldwide grew significantly, particularly in the late 1990's through a consolidation with AGT and the Black Dot Group. Seven Worldwide is controlled by an affiliate of funds managed by Kohlberg & Company, LLC, a private equity firm with offices in New York and California. Kohlberg affiliates acquired control of the Company in a recapitalization and buyout in 2003. Seven Worldwide is expected to have sales of approximately $360 million for the year ending December 31, 2004. The acquisition price is $191 million, with $122.4 million in cash and $68.6 million in Schawk stock (four million shares of Schawk common stock at $17.15 per share). The cash portion of the purchase price will be financed from borrowings under a new $100 million revolving credit facility and from a $50 million private placement of long-term fixed rate debt. The transaction will require approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions and is expected to close effective January 31, 2005. "To date, this will be the largest and most significant acquisition in the 51-year history of Schawk, Inc. It is a major step that is fully consistent with our strategic plan," said David A. Schawk, president and chief executive officer. "With a shared vision of providing an array of comprehensive, or end-to-end, solutions to industry-leading clients, Schawk and Seven Worldwide are creating an enterprise that will become the industry standard. Our combination will provide exceptional products and services from locations in the United States, Canada, Asia, the United Kingdom, Europe and, most recently, India." Schawk continued, "This acquisition allows the combined companies to significantly broaden global coverage and increase market leadership in the creation and production of packaging, advertising and in-store marketing and signage. Schawk has a solid track record of integrating acquisitions, maximizing synergies and increasing economic value for the Company and its shareholders. The combination of Schawk and Seven Worldwide integrates our companies' industry expertise, top personnel, and complementary high-end clients and their markets. Our service footprint will be unmatched across a variety of dimensions, including best practice-based expertise, capabilities, geographies, industries and technologies." John R. Harris, chief executive officer of Seven Worldwide, commented, "Our combination with Schawk is a natural progression of our efforts to transform our company into an even stronger industry leader. Both companies agree that our future success will be enhanced by expanding our combined ability to offer more services and drive increased value to our clients. This acquisition is particularly powerful because our companies are so complementary, serving global, blue-chip clients and employing a tremendous array of talented people and leading technology. Together, our organizations will be able to provide clients with a consistent supply of best practice-based solutions to help them meet the challenges they face everywhere in the world." With nearly 70 percent of Seven Worldwide's revenues falling within Schawk's core competencies, the consolidation of Schawk's and Seven Worldwide's operations is expected to be accretive to earnings in 2005. Mr. Schawk concluded, "This transaction and our recently announced acquisition of Winnetts in the United Kingdom are very significant steps for Schawk. Through these transactions, we will be taking major steps toward maximizing our ability to service our clients' expanding global needs. Seven Worldwide and Schawk have long been held in high regard for their client dedication, innovation, collaboration and quality. The Schawk-Seven Worldwide transaction ties strength to strength, making our combined company stronger then the sum of its parts."