Sale of Division to Mullen Group Ltd. Supports
Quad’s Strategy to Optimize Its Product and Service Portfolio
Quad/Graphics, Inc. (NYSE: QUAD) (“Quad” or the “Company”) today
announced that it has sold its QuadExpress third-party logistics
(3PL) business for $40 million to Mullen Group Ltd. (TSX: MTL)
(“Mullen Group”), one of Canada’s largest logistics providers.
QuadExpress joins Mullen Group’s network of independently operated
businesses that provide a broad range of service offerings
including less-than-truckload, truckload, warehousing, logistics,
transload, oversized and specialized hauling transportation.
The divestiture supports Quad’s established strategy to optimize
its product and service portfolio and invest in those parts of its
business that accelerate its position as a marketing solutions
partner and create more value for its clients and other
stakeholders. Quad continues to own and operate its in-house
transportation and logistics division, Quad Transportation
Services, and its trucking division, Duplainville Transport.
The transaction closed on June 30, 2021. Quad will use proceeds
from the sale to continue to pay down debt and improve its debt
leverage ratio as part of a continuing focus on returning to its
preferred long-term targeted leverage range of 2-2.5x.
“We continue to evaluate our collection of assets with a focus
on long-term value creation and strategic fit,” said Joel
Quadracci, Chairman, President and CEO of Quad. “As a marketing
solutions partner, we are committed to providing the greatest value
to brands and marketers, which we do through our unique integrated
marketing solutions offering that reduces complexity, increases
efficiencies and improves marketing spend effectiveness across all
media channels. We are pleased to find a great buyer for our 3PL
business. We know QuadExpress will benefit from being part of
Mullen Group, which is a like-focused company dedicated to superior
logistics services. We will benefit, too, through an ongoing
relationship with QuadExpress, which will serve as a preferred
broker for our dedicated in-house transportation and logistics
division.”
Quad acquired QuadExpress (formerly QWExpress) in July 2010 as
part of the Worldcolor acquisition. In subsequent years, Quad made
significant, strategic investments in the business, including
creating a proprietary Transportation Management System (TMS)
called SilverExpress that streamlines its clients’ ability to
request quotes, generate orders, track shipments, conduct reporting
and more.
Mesirow Financial’s Investment Banking Group served as the
exclusive financial advisor to Quad on this transaction, and
Reinhart Boerner Van Deuren S.C. served as legal advisor to
Quad.
Forward-Looking Statements
This press release contains certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include statements regarding,
among other things, our current expectations about the Company’s
future results, financial condition, sales, earnings, free cash
flow, margins, objectives, goals, strategies, beliefs, intentions,
plans, estimates, prospects, projections and outlook of the Company
and can generally be identified by the use of words or phrases such
as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,”
“plan,” “foresee,” “project,” “believe,” “continue” or the
negatives of these terms, variations on them and other similar
expressions. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause
actual results to be materially different from those expressed in
or implied by such forward-looking statements. Forward-looking
statements are based largely on the Company’s expectations and
judgments and are subject to a number of risks and uncertainties,
many of which are unforeseeable and beyond our control.
The factors that could cause actual results to materially differ
include, among others: the negative impacts the coronavirus
(COVID-19) has had and will continue to have on the Company’s
business, financial condition, cash flows, results of operations
and supply chain, as well as the global economy in general
(including future uncertain impacts); the impact of decreasing
demand for printed materials and significant overcapacity in the
highly competitive environment creates downward pricing pressures
and potential underutilization of assets; the impact of digital
media and similar technological changes, including digital
substitution by consumers; the impact of fluctuations in costs
(including labor and labor-related costs, energy costs, freight
rates and raw materials) and the impact of fluctuations in the
availability of raw materials; the inability of the Company to
reduce costs and improve operating efficiency rapidly enough to
meet market conditions; the impact of the various restrictive
covenants in the Company’s debt facilities on the Company’s ability
to operate its business, as well as the uncertain negative impacts
COVID-19 may have on the Company’s ability to continue to be in
compliance with these restrictive covenants; the impact of
increased business complexity as a result of the Company’s
transformation to a marketing solutions partner; the impact
negative publicity could have on our business; the failure to
successfully identify, manage, complete and integrate acquisitions,
investment opportunities or other significant transactions, as well
as the successful identification and execution of strategic
divestitures; the failure of clients to perform under contracts or
to renew contracts with clients on favorable terms or at all; the
impact of changing future economic conditions; the fragility and
decline in overall distribution channels; the impact of changes in
postal rates, service levels or regulations; the failure to attract
and retain qualified talent across the enterprise; the impact of
regulatory matters and legislative developments or changes in laws,
including changes in cyber-security, privacy and environmental
laws; significant capital expenditures may be needed to maintain
the Company’s platforms and processes and to remain technologically
and economically competitive; the impact of risks associated with
the operations outside of the United States, including costs
incurred or reputational damage suffered due to improper conduct of
its employees, contractors or agents; the impact of an other than
temporary decline in operating results and enterprise value that
could lead to non-cash impairment charges due to the impairment of
property, plant and equipment and intangible assets; the impact on
the holders of Quad’s class A common stock of a limited active
market for such shares and the inability to independently elect
directors or control decisions due to the voting power of the class
B common stock; and the other risk factors identified in the
Company’s most recent Annual Report on Form 10-K, which may be
amended or supplemented by subsequent Quarterly Reports on Form
10-Q or other reports filed with the Securities and Exchange
Commission.
Except to the extent required by the federal securities laws,
the Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
About Quad
Quad (NYSE: QUAD) is a worldwide marketing solutions partner
that leverages its 50-year heritage of platform excellence,
innovation, strong culture and social purpose to create a better
way for its clients, employees and communities. The Company’s
integrated marketing platform helps brands and marketers reduce
complexity, increase efficiency and enhance marketing spend
effectiveness. Quad provides its clients with unmatched scale for
client on-site services and expanded subject expertise in marketing
strategy, creative solutions, media deployment (which includes a
strong foundation in print) and marketing management services. With
a client-centric approach that drives the Company to continuously
evolve its offering, combined with leading-edge technology and
single-source simplicity, the Company has the resources and
knowledge to help a wide variety of clients in multiple vertical
industries, including retail, publishing, consumer technology,
consumer packaged goods, financial services, insurance, healthcare
and direct-to-consumer. Quad has multiple locations throughout
North America, South America and Europe, and strategic partnerships
in Asia and other parts of the world. For additional information
visit www.Quad.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20210630005243/en/
Investor Relations Contact Katie Krebsbach Investor
Relations Lead, Quad 414-566-4247 kkrebsbach@quad.com
Media Contact Claire Ho Director of Corporate
Communications, Quad 414-566-2955 cho@quad.com
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