Quad/Graphics to Acquire Worldcolor
Simultaneously with the closing, U.S. $140.0 million will be distributed in cash to
Quad/Graphics’ existing Common Shareholders. Quad/Graphics will also provide at least U.S.
$93.3 million to Worldcolor to purchase any Warrants not converted to Common Shares and to
fund redemptions of or payments due on any other equity securities not converted to Common
Shares. If less than $93.3 million is needed to make such purchases and redemptions, the
remainder will be distributed to Worldcolor Common Shareholders in cash.
The closing of the transaction is not contingent on financing. There is U.S. $1.2 billion of
committed financing from JPMorgan Chase and U.S. Bank to fund cash distributions, refinance
Quad/Graphics’ existing revolving credit facility, refinance Worldcolor’s existing debt
outstanding, fund expenses incurred in connection withthe transaction and fund repayment of
certain other Worldcolor obligations. As of September 30, 2009, the two companies had a
combined unaudited debt balance of approximately U.S. $1.7billion.
Completion of the acquisitionis subject to Quad/Graphics and Worldcolor shareholder and
regulatoryapprovals, including approval under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, the Canadian Competition Act and the Investment Canada Act. The transactionis
also subject to the approval of the Superior Court of Quebec, Commercial Division.
Shareholders of Quad/Graphics holding Quad/Graphics Common Shares having more than fifty
percent of the voting rights in Quad/Graphics have entered into a voting agreement in support
ofthe proposed transaction. The acquisition also is contingent on the SEC declaring effective
Quad/Graphics’ planned S-4/ProxyCircular filing.
Quad/Graphics and Worldcolor each have agreed not to solicit other offers, but may consider
superior proposals from third parties in certain circumstances, subject to the match rights of the
other party. The arrangement agreement also provides for the payment of a U.S. $40 million
break-up fee to either party if the transaction is not completed under certain circumstances.
J.P. Morgan Securities Inc. served as financial advisor to Quad/Graphics and Foley & Lardner
LLP and Torys LLP provided legal counsel. Morgan Stanley served as financial advisor to
Worldcolor and Sullivan & Cromwell LLP and Osler, Hoskin & Harcourt LLP provided legal