Standard Register (NYSE: SR) announced today that it has
acquired WorkflowOne in a transaction valued at $218 million,
financed by assuming $210 million of long-term debt and the
issuance of warrants with an estimated value of $8 million. The
transaction advances Standard Register’s revenue position, enhances
its product and solutions portfolio, broadens its customer base,
improves its cost structure and provides greater financial
flexibility and stability.
Standard Register expects to achieve $1 billion in annual
revenue and $40 million in annual savings when the integration of
the two companies is complete. The acquisition is expected to
deliver value creation benefits immediately from combined sales and
operating capabilities and to improve 2013 EBITDA (a non-GAAP
measure of earnings before interest, taxes, depreciation and
amortization). The Company will go to market under the Standard
Register corporate umbrella and will rapidly integrate its
operations. WorkflowOne will initially operate as a subsidiary of
Standard Register. Joseph P. Morgan, Jr., president and chief
executive officer of Standard Register, will lead the combined
company. Timothy A. Tatman, former president and chief executive
officer of WorkflowOne, will serve in an advisory capacity through
the integration.
Both companies are headquartered in Dayton, Ohio, with software
development, traditional and digital printing and distribution
facilities throughout the U.S. and in Canada and Mexico. Standard
Register serves many of the largest healthcare and commercial
organizations with a portfolio of technology-enabled multi-channel
communication and marketing solutions supported by a nationwide
printing, kitting and distribution network. WorkflowOne provides
printing, document management, distribution and marketing services
to a large customer base. The combined company has 4,000 employees,
including 920 in Dayton.
“This strategic combination brings together two companies with
highly complementary business and market presence to create a
leading player in workflow, communications and analytics,” said
Morgan. “The acquisition of WorkflowOne increases our customer base
and incremental growth opportunities. It also provides new markets
and capabilities in retail and promotional products and
cross-selling opportunities. And, importantly, we are acquiring a
significant pool of talented people with expertise in our industry
and markets.”
“Standard Register has a defined, demand-based strategy that
embraces the changes taking place within the printing industry. By
embracing the changes, we have been able to identify new
technology-enabled solutions that are growing in the marketplace
and build a strategic roadmap of investments that will position us
for continued success. Standard Register and WorkflowOne have a
combined heritage in printing, document management and
communications that is enhanced through this acquisition. We have
identified many synergies in this part of the business, including
simplifying processes, leveraging engineering expertise, optimizing
the supply chain and improving overall capacity utilization. The
cash flow from this large manufacturing network will be a source
for fueling future growth,” Morgan continued. “We have a keen
understanding of the trends taking place in our combined key market
segments of healthcare, financial services, manufacturing and
retail, and are continuing to develop innovative solutions in
marketing communications, customer communications, product
marketing and labeling, patient identification and safety and
patient information.”
“We have engaged AlixPartners to help us with integration
planning and synergy alignment. They provided valuable counsel for
our strategic restructuring and have a deep understanding of our
company and markets,” Morgan said.
In addition to creating one of the largest printing and print
management companies in North America, the combination:
- Increases customer diversification and
penetration in our strategic markets with more than 12,000
customers
- Serves most of the nation’s largest
bank holding companies and financial services companies
- Creates a $300 million healthcare
patient-centric communications business
- Establishes Standard Register among the
top 10 label manufacturers in North America, and
- Adds a top 15 promotional products
business
“By joining forces with Standard Register, we will be able to
provide our customers with deeper capabilities across a broader
range of products and services than ever before,” said Tatman. “I
am very excited about the future of our combined companies.”
BofA Merrill Lynch served as financial advisor to Standard
Register and Perella Weinberg Partners advised WorkflowOne.
Renewal and Expansion of Credit Facility
In conjunction with the transaction, Standard Register announced
it has completed an early renewal and an expansion of its credit
facility. The Company entered into a five-year $125 million
senior-secured asset-based credit facility that provides additional
liquidity and the ability to capitalize on opportunities to grow
the company. The new facility amends and extends the existing
credit facility, which was due to mature on March 31, 2014. The
facility is secured by the Company’s existing and future working
capital assets. Proceeds will be used for financing working
capital, expanding investment and for general corporate purposes of
the newly combined company. Bank of America, N.A. is the Lead
Arranger for the credit facility.
Conference Call
Standard Register’s President and Chief Executive Officer Joseph
P. Morgan, Jr., and Chief Financial Officer Robert Ginnan will host
a conference call at 10:00 a.m. EDT on August 1, 2013, to discuss
the transaction benefits and second quarter 2013 performance. The
call can be accessed via an audio webcast accessible at
http://www.standardregister.com/investorcenter.
About Standard Register
Standard Register (NYSE:SR), is trusted by the world’s leading
companies to advance their reputations and add value to their
operations by aligning communications with corporate standards and
priorities. Providing market-specific insights and a compelling
portfolio of workflow, communications and analytics solutions to
address the changing business landscape in healthcare, financial
services, manufacturing and retail markets, Standard Register is
the recognized leader in the management and execution of
mission-critical communications. More information is available at
http://www.standardregister.com.
Safe Harbor Statement
This press release contains forward-looking statements covered
by the Private Securities Litigation Reform Act of 1995. Because
such statements deal with future events, they are subject to
various risks and uncertainties and actual results could differ
materially from the Company’s current expectations.
Factors that could cause the Company’s results to differ
materially from those expressed in forward-looking statements
include, without limitation, our ability to successfully integrate
the acquired assets or achieve the expected synergies of the
WorkflowOne acquisition, access to capital for expanding in our
solutions, the pace at which digital technologies and electronic
health records (EHR) adoption erode the demand for certain products
and services, the success of our plans to deal with the threats and
opportunities brought by digital technology, results of cost
containment strategies and restructuring programs, our ability to
attract and retain key personnel, variation in demand and
acceptance of the Company’s products and services, frequency,
magnitude and timing of paper and other raw material price changes,
the timing of the completion and integration of acquisitions,
general business and economic conditions beyond the Company’s
control, and the consequences of competitive factors in the
marketplace, including the ability to attract and retain customers.
The Company undertakes no obligation to revise or update
forward-looking statements as a result of new information, since
these statements may no longer be accurate or timely. For more
information, see the Company’s most recent Form 10-K and other
filings with the Securities and Exchange Commission.
Standard RegisterInvestor and media contact:Carol Merry,
614-383-1624carol.merry@fahlgren.com
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