Burst! Donnelly, the largest printing company in North America, was acquired
According to foreign media reports, RR Donnelley (RR Donnelley) will be acquired by Atlas Holdings and privatized in the form of an all-cash transaction, valued at approximately US$2.1 billion.
On November 3, US time, this final merger agreement was unanimously approved by Donnelly’s board of directors.
This acquisition is expected to be completed in the first half of 2022, but still needs approval from Donnelly shareholders and regulators. After the transaction is completed, Donnelly’s stock will no longer be traded on the New York Stock Exchange, and RRD will become a private company.
high premium acquisition
According to the terms of the transaction, Atlas Holdings, headquartered in Greenwich, Connecticut, USA, will acquire all the outstanding shares of Donnelly's common stock. Donnelly shareholders will receive $8.52 per share in cash from the common stock.
The purchase price is a premium of approximately 29.1% over Donnelly’s closing price on November 2 and a premium of approximately 72.8% over Donnelly’s closing price on October 11.
For the period ending October 11, 2021, the price is also approximately 64.1% higher than the 60-day volume-weighted average price of Dunnelly.
Donnelly refused to buy at a higher premium
John Pope, Chairman of the Donnelly Board of Directors, said: "After careful and thorough analysis, the Donnelly Board of Directors believes that this transaction that immediately generates a premium and a certain cash value is in the best interests of Donnelly and our shareholders. We look forward to working with Atlas to complete this value-added transaction."
Dan Knotts, President and CEO of Donnelly, added: “Today’s announcement represents the next stage in the exciting journey of Donnelly. This transaction is a true testament to our outstanding employees. The enthusiasm and dedication to serving customers helped us build the company into today’s industry-leading marketing and commercial communications company."
"Under our new ownership structure, they will get more career development opportunities in the future." Dan Knotts said.
Earlier today, before Atlas Holdings announced the acquisition, Chatham Asset Management, Donnerley’s largest investor, had increased its offer to acquire the remaining shares of the company at a price of $9 in cash per share to $9.50, which is higher than its offer. Quotation of $7.50 per share in cash in October.
Atlas Holdings Inc. has annual revenues of US$10 billion and previously acquired LSC Communications
Atlas Holdings was founded in 2002 by Tim Fazio and Andrew Bursky. At first, they acquired a small paper mill in Indiana and hired 85 employees.
The company and its affiliates currently own and operate 23 platform companies, which employ approximately 40,000 employees in more than 250 factories around the world and generate approximately US$10 billion in revenue each year.
Donnelley was created by the "old" Donnelley Group in 2016 by a three-party split. LSC Communications and Donnelley Financial Solutions were split into separate entities. And LSC Communications was acquired by Atlas Holdings in 2020. The US-based printing company has a turnover of 3.3 billion U.S. dollars and will enter bankruptcy protection procedures in the spring of 2020. Perhaps this is because this acquisition made Atlas Holdings determined to acquire Donnelly.
In the US "Printing Impressions" magazine's 2020 "Top 350 North American Printing Companies" rankings, Donnelly ranked first with sales of 5.5 billion US dollars, down 3% year-on-year; while LSC Communications received 2.845 billion US dollars. Sales revenue, ranked third, fell 22% year-on-year.
Atlas co-founder and managing partner Fazio said: “Atlas is a trusted partner for companies that have a good track record of innovation and customer service, as well as significant opportunities for continued growth.
"And this is what we saw in Donnelly. We look forward to working with Donnelly's talented and experienced team and welcome Donnelly colleagues to the Atlas family."
Donnell said that according to the terms of the merger agreement, they may seek additional acquisition proposals from a third party within 25 days after the merger agreement is signed.
Affected by the good news, Donnelly’s share price rose nearly 40%
Donnelly also announced its third-quarter financial results. Performance shows that Donnelly's net sales in the third quarter of fiscal 2020 increased by 6.4% to US$1.27 billion.
Before the new crown pneumonia epidemic, Donnelly developed a so-called "poison pill" plan to prevent anyone from gaining "improper influence or control" on the company without the approval of the board of directors.
Before going public on November 3, Donnelly’s stock rose nearly 40% to $9.23.
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