Vertis Holdings Inc. Wednesday said it has filed for relief under Chapter 11 bankruptcy protection act, and has agreed to be acquired by Quad/Graphics Inc. (QUAD: Quote) for $258.5 million.
Quad/Graphics expects the acquisition to be accretive to its 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, the Sussex, Wisconsin-based company said in a statement.
Quad/Graphics expects the deal to strengthen its retail advertising inserts, direct marketing and in-store marketing solutions. Vertis is expected to generate about $1.1 billion in revenues for the fiscal year 2012.
Quad/Graphics expects to fund the acquisition using cash on hand and with borrowing from its revolving credit facility.
This is for the third time since 2008 that Vertis has filed for bankruptcy protection. In 2010, Vertis had exited from the bankruptcy by exchanging its debt for equity.
Vertis has obtained $150 million financing to ensure that it runs its operations as usual, while the company seeks approval from court for the deal.
Vertis will also evaluate any competing bids to get the best offer for its business. The company expects to receive Court approval in the fourth quarter, secure the necessary regulatory approvals in the first quarter of 2013 or earlier, and close the transaction shortly thereafter.
QUAD closed Wednesday's trading at $18.96, up $0.05 or 0.26%, on the Nasdaq. The stock further gained $0.24 or 1.27% in after-hours.
by RTT Staff Writer
For comments and feedback: email@example.com