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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For JULY 12 1999
QUEBECOR PRINTING INC.
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(Translation of Registrant's Name into English)
612 Saint-Jacques Street, Montreal, Quebec, Canada H3C 4M8
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(Address of Principal Executive Office)
(Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F)
Form 20-F Form 40-F X
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(Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
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PRESS RELEASE OF
QUEBECOR PRINTING INC.
FILED IN THIS FORM 6-K
July 12, 1999 (# 11/99)
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QUEBECOR PRINTING AND WORLD COLOR TO MERGE
NEW YORK - Quebecor Printing Inc. and World Color Press, Inc. announced today
the signing of a definitive merger agreement pursuant to which Quebecor
Printing will acquire all of the shares of Greenwich, Connecticut-based World
Color Press, Inc., one of the United States' leading commercial printers, in
a transaction valued at approximately US $2.7 billion. The acquisition, the
largest in the history of the printing industry, makes the combined new
Company, to be known as Quebecor World Inc., the largest commercial printer
in the world serving customers in magazines, catalogs, books, retail inserts
and circulars and specialty/direct mail printing.
The definitive merger agreement provides for the acquisition by a subsidiary
of Quebecor Printing pursuant to a tender offer to purchase for cash up to
23.5 million shares of common stock representing approximately 62% of the
outstanding shares of World Color to be followed by a merger with World Color.
Quebecor Printing will pay approximately US $840 million in cash under the
tender offer, representing US $35.69 per share, and assume the debt of World
Color in the approximate amount of US $1.3 billion. In addition, Quebecor
Printing will issue approximately 23.8 million subordinate voting shares in
the merger, representing a fixed exchange ratio of 1.6455 subordinate voting
shares of Quebecor Printing per share of common stock of World Color. In
addition, approximately US $41 million in cash and 1.2 million Quebecor
Printing subordinate voting shares will be paid to World Color option holders.
The total consideration per share of World Color is equivalent to US $36.09
per share and represents a premium of 30% on the basis of the weighted
average trading price of each of World Color common stock and Quebecor
Printing subordinate voting shares on the New York Stock Exchange for the 20
trading days to July 9, 1999.
Quebecor Printing has entered into Lock-up Agreements with a number of World
Color management shareholders, affiliates of Kohlberg Kravis Roberts & Co. as
well as institutional shareholders pursuant to which such shareholders have
agreed to tender their common shares representing approximately 24.5% of all
outstanding common shares. The Board of Directors of World Color has
determined by a unanimous vote that the offer and the merger are fair and in
the best interests of World Color and its shareholders and recommended
acceptance of the offer. Morgan Stanley Dean Witter Inc. has acted as a
financial advisor to World Color and has rendered a fairness opinion.
The offer is subject to 50.1% of World Color shares being tendered to the
offer and regulatory approvals including the expiration of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Both
the tender offer and the merger are expected to be completed within four
months.
RBC Dominion Securities Inc. and Credit Suisse First Boston Corporation are
acting as financial advisors to Quebecor Printing.
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QUEBECOR PRINTING AND WORLD COLOR TO MERGE
"Two of the fastest growing commercial printers have joined to create a new
industry leader, committed to continued growth, sensitive to customer needs
and positioned to set new highs in shareholder expectations," said Charles
Cavell, President and Chief Executive Officer of Quebecor Printing. "The
World Color management team enjoys a stellar reputation in our industry. The
fit of our two companies couldn't be better from the point of view of
customers and shareholders," he said.
Robert G. Burton, Chairman and Chief Executive Officer of World Color, said,
"World Color has accomplished a tremendous amount over the last ten years. We
have committed to and delivered results to our customers and shareholders
year after year. This merger brings together two major league teams and
positions us well to continue to deliver results that benefit employees,
customers and shareholders. Quebecor Printing, with its global presence and
World Color, with its solid position in the US, will create a tremendous team
capable of meeting the needs of our customers through the millennium.
Together, our commitment to shareholders, customers and employees through
strategic acquisitions, selective technology upgrades, cost control and
flawless execution becomes even stronger."
Pierre Karl Peladeau, Vice Chairman of Quebecor Printing and President and
Chief Executive Officer of Quebecor Inc., said, "Quebecor is proud to be at
the forefront of bringing together two of the most successful printing
companies in the world. No two companies are better suited to merge for the
good of improved customer service and increased shareholder value."
In the new management structure, Charles Cavell will be President and Chief
Executive Officer of Quebecor World. World Color President and Chief
Operating Officer, Marc Reisch, will become Chairman, President and Chief
Executive Officer of Quebecor Printing's and World Color's combined North
American operations.
Marc Reisch stated, "This is a merger of two very focused growth companies. I
look forward to pulling the talent together from both organizations to form
the strongest, most responsive management group in the industry. I am
confident that our customers will be significant winners when the deal is
completed. "
In addition, a committee of the Office of the President made up of Charles
Cavell, Pierre Karl Peladeau, Marc Reisch, Quebecor Printing Canada President
Christopher Rudge and Christian Paupe, Executive Vice President of Quebecor
Printing, will be created to deal with strategic issues in relation to the
Company's global operations.
Robert G. Burton, Chairman and Chief Executive Officer of World Color, has
elected to pursue other business interests following the completion of the
tender offer. Mr. Burton will, however, become a member of the Quebecor World
Board of Directors and will be an active member of the integration team
merging the two companies.
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QUEBECOR PRINTING AND WORLD COLOR TO MERGE
BACKGROUND INFORMATION
THE PRINTING INDUSTRY
The United States is the largest print market in the world. With sales of
over US $150 billion annually, the industry remains highly fragmented and
competitive. Growth from 1992 to 1998 has been 3.8% annually. There are over
52,000 printing companies in the United States although there has been some
consolidation among the top 150 firms. The top ten printing companies have
revenues of over US $1 billion each, 56 companies have revenues in the range
of US $100 million to US $1 billion each and 120 firms revenues from US $35
million to US $100 million each.
GLOBAL PRINT MARKET
(In millions of $US)
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MARKET SIZE MERGED COMPANY SALES MERGED COMPANY RANK
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<S> <C> <C> <C>
United States 153,400 4,681 #1
Europe 90,000 845 #1
Canada 10,500 614 #1
South America 8,000 98 #2
</TABLE>
Source : Print Forecasts, InterGraf, QPI Management, Graphic Monthly
Company restructuring will continue as printers focus on core businesses and
adopt an increasingly disciplined approach to technology investment,
concentrating on those technologies that customers demand and for which they
are willing to sign enabling contracts. While initially seen by some as a
threat, the Internet is increasingly regarded as an opportunity for printers
and as a complement to printed products such as magazines, catalogs and
flyers.
The merger with World Color will double Quebecor Printing's annual revenues
from US customers to US $4.7 billion representing 75% of the Company's 1998
pro forma world-wide consolidated revenues of US $6.2 billion. The merger
will result in increased liquidity of Quebecor Printing stock allowing easier
investor access on the New York Stock Exchange and the Toronto and Montreal
exchanges. At the close of the transaction, the US and Canadian portions of
the Quebecor World stock's free float will be at similar levels.
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QUEBECOR PRINTING AND WORLD COLOR TO MERGE
QUEBECOR PRINTING
Quebecor Printing has grown twelve-fold over the past decade largely through
acquisitions. In 1990, the Company became the second largest printer in the
United States with the acquisition of Maxwell Graphics Holdings. It has
continued its growth in the United States through a number of key strategic
acquisitions including American Signature (catalogs); Eagle Lithographing,
Sayers Communications and the Petty Company (direct mail and specialty); and
the Franklin Division of Brown Printing (magazines and catalogs).
Quebecor Printing's growth has been marked by a strategy of geographic and
product line diversification. With 115 facilities in 14 countries on four
continents, Quebecor Printing is a global printer, able to serve national and
international customers from a base of networked and technologically advanced
printing facilities. Its North American network that services major
retailers, catalog and magazine customers is among the most modern in the
industry. The Company's 1998 annual revenues were US $3.8 billion and with
26,000 employees world-wide, it ranked, prior to this transaction, as the
largest printer in Europe and the second largest in North America and South
America. Its customers include Sears, TIME, FORTUNE, PEOPLE, SPORTS
ILLUSTRATED, USA WEEKEND, PARADE, Simon & Schuster, Marks & Spencer,
Christian Dior and Maclean Hunter.
WORLD COLOR
Founded in 1903, World Color operates 58 facilities in the United States and
has 16,000 employees. With 1998 pro forma revenues of US $2.5 billion, the
Company's three largest business segments are commercial, inserts and
circulars (29%), magazines (26%), and catalogs (23%). Books (9%), direct mail
(8%) and directories (5%) make up the balance of its product mix.
With a highly regarded management team, World Color has also expanded and
diversified by taking advantage of the acquisition opportunities in the
fragmented US print market. Since 1993, the Company has completed 25
accretive acquisitions. Its most recent acquisitions include Magna Graphics,
a pre-press operation servicing customers in the educational textbook market;
Dittler Brothers, a direct mail and commercial printing operation; Acme
Printing, an award-winning commercial printer; Century Graphics Corporation
and Great Western Publishing, both retail insert printers; and Downey
Printing, a directory printer.
STRATEGY
Quebecor Printing has successfully completed over 60 acquisitions for a value
of US $2.5 billion. World Color provides the best potential for synergies due
to the high degree of similarity with Quebecor Printing's product mix; a
similar shareholder,
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QUEBECOR PRINTING AND WORLD COLOR TO MERGE
customer and employee-oriented management philosophy; and a strong
complementary technology asset base. The Company has superior operating
margins and low sales, general and administrative costs.
A swift integration is planned upon the close of the transaction. Management
believes that the merger of the two companies will result in approximately US
$50 million in annual synergies, although there can be no assurance that
these savings will be realized. Printing facilities will be integrated in
accordance with client needs and commitments and will be linked to Quebecor
Printing's North American fiber-optic network to facilitate work transfer and
improve customer service and asset utilization. Sales force integration and
the elimination of duplicate head office and product group functions as well
as integration with Quebecor Printing's Switzerland-based world-wide
procurement center will be implemented.
World Color Press, Inc. (NYSE: WRC) headquartered in Greenwich, Connecticut,
is a leader in the management and distribution of print and digital media
information. The Company specializes in the production and distribution of
content for customers in the commercial, magazine, catalog, direct mail, book
and directory markets. Founded in 1903, World Color employs over 16,500
employees and operates 58 facilities with a network of sales offices
nationwide.
Quebecor Printing Inc. (NYSE:PRW; ME:IQI; TSE:IQI), a diversified global
commercial printing company, is the largest commercial printer in Canada and
Europe and one of the largest in the United States and South America. The
Company is a market leader in most of its major product categories which
include magazines, inserts and circulars, books, catalogs, specialty
printing, directories, related services and CD-ROM mastering and replicating.
The Company has over 26,000 employees working in more than 115 printing and
related facilities in the United States, Canada, France, the United Kingdom,
Spain, Germany, Sweden, Finland, Chile, Argentina, Peru, Colombia, Mexico and
India. Quebecor Printing is a subsidiary of Quebecor Inc.
Quebecor Inc. (ME & TSE: QBR) is a communications holding company with
revenues of over $8 billion. With business activities spread throughout North
America, Europe, South America and Asia, the Company operates in five main
sectors. The Company has publishing (including distribution and retail),
broadcasting and multimedia activities through its subsidiaries Sun Media
Corporation and Quebecor Communications Inc. Through its subsidiary Quebecor
Printing Inc., it ranks as the largest commercial printer in Canada and
Europe and one of the largest in the United States and South America. Through
its subsidiary Donohue Inc., it is a major integrated forest products company
engaged in forest management to ensure its fiber supply, and in the
manufacture and sale of newsprint, specialty papers, market pulp and wood
products. Quebecor employs more than 43,000 people in 14 countries.
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QUEBECOR PRINTING AND WORLD COLOR TO MERGE
Except for historical information contained herein, the statements in this
release are forward-looking and made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties which may cause
the Company's actual results in future periods to differ materially from
forecasted results. Those risks include, among others, changes in customers'
demand for the Company's products, changes in raw material and equipment
costs and availability, seasonal changes in customer orders, pricing actions
by the Company's competitors, changes in estimates of the readiness of the
Company or its vendors and customers with regard to Year 2000 issues and the
significance of costs thereof, and general changes in economic conditions.
Those and other risks are more fully described in the Company's filings with
the Securities and Exchange Commission.
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FOR FURTHER INFORMATION:
John Paul Macdonald James E. Lillie
Director, Corporate Communications Executive Vice President
Quebecor Printing Inc. Investor Relations and Corporate
(514) 877-5317 Communications
(800) 567-7070 World Color Press, Inc.
(203) 532-4242
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
QUEBECOR PRINTING INC.
By: (s) CLAUDINE TREMBLAY
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Name: Claudine Tremblay
Title: Assistant Secretary
Date: July 12, 1999
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