Special Report: What Does Quad's Worldcolor Acquisition Mean to the Marketplace?
There's been no shortage of news about Quad Graphics' pending purchase of Worldcolor. But now that the dust has begun to settle, what does it mean to the printers' customers? And what will it mean to the rest of the marketplace? Publishing Executive Inbox consulted a trio of experts for their insights and analysis on this monumental merger. D. Eadward Tree is the anonymous blogger behind Dead Tree Edition, a blog covering the production and distribution of publications. Alex Brown is president of Printmark, a consultancy specializing in manufacturing and magazine management. And a senior consumer magazine publishing executive—who agreed to participate on the condition of anonymity—weighed in as well.
INBOX: In all honesty, did you see this coming? Were there other acquisition scenarios that looked more likely, and if so, are any of those affected by this deal?
MAG EXEC: No way did I see this coming. I'm not sure which is more surprising—Quad going public or Quad buying a competitor that is actually bigger than itself.
D. EADWARD TREE: I have acknowledged in my blog that I had to "pick my teeth up off the floor," so obviously I was surprised. I thought Worldcolor would go it alone or that perhaps some kind of deal would be done with Donnelley.
ALEX BROWN: No, I didn't have the foresight to imagine a merger between two such vastly different cultures. It's easy now to realize that any consolidation seems to promise an increase in profitability, and printers will look to any quarter for rescue. But these two companies look so little like allies that you realize the building must really be on fire if they're going to be driven together.
It also came as a surprise because Donnelley's overtures, at what I believe to be a similar acquisition price, were rebuffed by Worldcolor last summer. Apparently, the Quad deal solved problems other than valuation, presumably including the structure of the new organization and the roles for key Worldcolor people in it.