Printers Quad/Graphics and Transcontinental on July 13 announced that they have agreed to swap assets: Quad will acquire Transcontinental’s Mexican operations and sell its Canadian operations to Transcontinental.
The transactions have been approved by the boards of directors of both companies and are subject to customary regulatory clearances, including under the Mexican Federal Law on Economic Competition and the Canadian Competition Act. Both are expected to close in the fall.
The agreement will make Quad the leading producer of magazines, retail inserts and catalogs in Mexico. Transcontinental now employs about 900 people among its three facilities in Azcapotzalco, Toluca and Xochimilco, Mexico, which expect to generate about $70 million for fiscal 2011.
Meanwhile, Transcontinental as part of the Canadian transaction will assume retirement pension and post-retirement obligations of about $75 million. It acquire seven Quad/Graphics facilities located in Aurora, Concord and Markham (Toronto), Ontario; LaSalle and Montreal, Québec; Edmonton, Alberta; and Dartmouth, Nova Scotia.
The six printing plants and a premedia operation employ approximately 1,500 people and are forecasted to generate about $310 million in fiscal 2011. (The deal does not include Quad/Graphics’ Vancouver, B.C., facility.)
As part of the transaction, Transcontinental will also transfer to Quad/Graphics its printing business for black-and-white books destined for U.S. export. The unit represents about $25 million in revenue.