Your mailbox may be filled with Quad/Graphics' handiwork. A leading US printing company, Quad/Graphics produces catalogs, magazines, books, direct mail, and other commercial material. Services include production, design, photography, binding, wrapping, and distribution. It has produced catalogs for Bloomingdale's, books for National Geographic, and magazines such as Time Inc.'s People. The company owns some 140 facilities in about 20 countries throughout North America, Latin America, and Europe. Quad/Graphics was founded in 1971 by the late Harry Quadracci.
Change in Company Type
In a game-changing deal worth some $1.2 billion, Quad/Graphics acquired Canadian rival World Color Press (WCP) in 2010. The purchase combined two of the largest players in the highly fragmented commercial printing industry, and Quad/Graphics became a publicly traded company. WCP shareholders received about 40% of the newly issued shares of Quad/Graphics, and Quad/Graphics shareholders assumed ownership of the rest.
The purchase added about 70 printing plants to Quad/Graphics' network and expanded its reach into Canada and certain Latin American markets. It also brought Rolling Stone, Sports Illustrated, and Forbes on board its client roster. After the dust settled on the deal, Quad/Graphics closed eight plants, as well as World Colors' headquarters in Montreal; it also cut administrative functions. All total, the company eliminated more than 4,000 jobs in 2010.
In a significant move that switched Quad/Graphics' North American growth trajectory from Canada to Mexico, in 2011 and 2012 the company swapped several assets with Montreal-based print company Transcontinental . As part of the exchange, Quad/Graphics acquired three of Transcontinental's facilities in Mexico, and sold all but one of its eight Canadian facilities to Transcontinental (Quad/Graphics retained its Vancouver facility). Quad/Graphics decided that operations in Canada would have required a substantial capital investment, while it views Mexico has having higher growth potential. It also reported that the Canadian business had underfunded pension obligations.
Mergers and Acquisitions
Quad/Graphics in 2012 made plans to acquire marketing services provider Vertis for $258.5 million. It is using Vertis to enhance Quad/Graphics' position as a leader in the production of retail advertising inserts and direct marketing and in-store marketing solutions. The company will provide continuity, financial stability, and continued business investment for Vertis' clients and employees.
The Word Color Press acquisition was the key factor in Quad/Graphics jump in revenue in 2010 to nearly $3.4 billion, up from about $1.8 billion in 2009. As for net income, in 2010 Quad/Graphics reported a loss of about $250 million, compared with earnings of more than $50 million in 2009, primarily due to restructuring, impairment, and transaction-related charges from the deal.
Sales and Marketing
Quad/Graphics' growth strategy is also focused on consistent contract wins and renewals. In 2010 the printing company extended its multiyear contract with J. Crew. Quad/Graphics prints 40 million catalogs each year for the apparel retailer. During the same time period, Quad/Graphics inked a five-year deal with Hearst Magazines. As per the agreement, Quad/Graphics is printing five of the publisher's magazines: Good Housekeeping; O, The Oprah Magazine; Harper's Bazaar; House Beautiful; and Veranda.
The family of company founder Harry Quadracci controls the firm through ownership of its high-voting Class B shares. – less