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Quad/Graphics to Acquire Vertis

October 12, 2012
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Quad/Graphics, Inc. (NYSE: QUAD) ("Quad/Graphics") and Vertis Holdings, Inc. ("Vertis") today announced the execution of an agreement through which Quad/Graphics will acquire substantially all of the assets comprising Vertis' businesses for $258.5 million, which includes the payment of approximately $88.5 million for current assets that are in excess of normalized working capital requirements. Upon completion, the acquisition will enhance Quad/Graphics' position as a leader in the production of retail advertising inserts, direct marketing and instore marketing solutions while providing continuity, financial stability and continued business investment for Vertis' clients and employees.

Quad/Graphics intends to use cash on hand and draw on its revolving credit facility to finance the acquisition of Vertis. Vertis expects to generate approximately $1.1 billion in revenues and approximately $60 million in EBITDA, adjusted for restructuring, impairment and other transaction-related expenses, during fiscal year 2012. After taking into account significant anticipated synergies, Quad/Graphics expects that the acquisition will be accretive to earnings, excluding any non-recurring integration costs. The combined entity will realize efficiencies and cost-savings derived from a superior and more efficient operating platform, expanded volume-driven mailings and more efficient procurement programs.

Clients will benefit from an enhanced range of products, services and revenue-generating solutions; expanded industry vertical expertise; increased manufacturing flexibility and distribution efficiencies from an extended geographic footprint; and new opportunities to realize mailing and distribution costsavings from the combined volumes and capabilities of the two companies.

"Quad/Graphics believes in the power of print in today's multichannel media world and this acquisition further strengthens our ability to help retailers and direct marketers drive meaningful business results," said Joel Quadracci, Chairman, President & CEO of Quad/Graphics. "The combination of Quad/Graphics and Vertis is a natural and strategic fit. The complementary capabilities of our two businesses in retail advertising inserts, direct marketing and in-store marketing will further strengthen and expand our offerings, and will allow us to even better serve our clients, achieve additional efficiencies and build longterm value for our shareholders. We look forward to welcoming Vertis' clients and employees into our family."

Vertis' board and senior management team accepted the offer from Quad/Graphics following an extensive and in-depth process to review strategic opportunities for its businesses conducted over the past several months.

"The offer from Quad/Graphics was the most compelling proposal we received because it ensures continuity for clients and the greatest number of opportunities for our employees while also maximizing value for our stakeholders," said Gerald Sokol, Jr., Chief Executive Officer of Vertis. "By combining the talents and resources of these two great companies, we will be able to enhance the levels of service, quality and technological innovation we provide to our clients, further improving the effectiveness of our programs and increasing clients' returns on their marketing investments. We are excited by the opportunities ahead and thank our lenders for their continued support in securing a smooth transition for our businesses."

 

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