Quad/Graphics to Acquire Brown Printing Company

  Quad/Graphics to Acquire Brown Printing Company

Acquisition Enhances Quad/Graphics’ Offering to Magazine Publishers and
Catalog Marketers

Business Wire

SUSSEX, Wis. & WASECA, Minn. -- April 7, 2014

Quad/Graphics, Inc. (NYSE: QUAD) (“Quad/Graphics”) and Brown Printing Company
(“Brown”) today jointly announced a definitive agreement whereby Quad/Graphics
will acquire Brown, which serves premier publishers and catalogers with
printing, distribution and integrated media solutions. The acquisition will
enhance Quad/Graphics’ position as a leader in the printing industry.

The transaction is subject to customary regulatory clearances and is expected
to close in the second half of 2014. Both Quad/Graphics’ board of directors
and Brown’s parent company Gruner + Jahr and its shareholders approved the

Quad/Graphics is purchasing Brown for $100 million and intends to use cash on
hand or draw on its revolving credit facility to finance the acquisition.
Brown expects to generate approximately $350 million in revenues during fiscal
year 2014. Quad/Graphics expects that the acquisition will be accretive to
earnings and that the purchase price multiple will be less than four times
Adjusted EBITDA after taking into account anticipated synergies.

“This acquisition is consistent with our ongoing strategy to transform
Quad/Graphics and create value for our clients and shareholders,” said Joel
Quadracci, Quad/Graphics Chairman, President & CEO. “Brown is a well
respected, financially strong company focused on delivering superior quality
and impeccable customer service to a diverse range of clients. This
acquisition will enhance the many ways we help publishers and marketers drive
top-line revenues while better controlling their overall total cost of
production and distribution. With print as our foundation, we will continue to
find innovative ways to connect and integrate print with other media channels
to increase reach, response and return on investment. We are excited by the
opportunities ahead and look forward to welcoming Brown’s clients and
employees into our family.”

“Brown has prospered under the ownership of Gruner + Jahr and its shareholders
for the past 35 years. Their strong financial support along with Brown’s
talented and dedicated employees has fueled our growth,” commented Mike
Amundson, President & CEO of Brown Printing Company. “Looking forward, we are
excited about this acquisition as it will benefit our clients through the
expanded depth of the combined platform. In addition, Brown and Quad/Graphics
are united by a common culture based on a passion for innovating and providing
the highest quality products and client experience in the industry. I am
convinced that Quad/Graphics is the best owner for the future of Brown.”

Brown Printing Company is advised in this transaction by Baker Hostetler.
Quad/Graphics is advised by Foley & Lardner LLP.

Forward-Looking Statements

This press release contains certain “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements regarding, among other things,
our current expectations about the Company’s future results, financial
condition, revenue, earnings, free cash flow, margins, objectives, goals,
strategies, beliefs, intentions, plans, estimates, prospects, projections and
outlook of the Company and can generally be identified by the use of words or
phrases such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,”
“plan,” “foresee,” “project,” “believe,” “continue” or the negatives of these
terms, variations on them and other similar expressions. These forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause actual results to be materially different from those expressed
in or implied by such forward-looking statements. Forward-looking statements
are based largely on the Company’s expectations and judgments and are subject
to a number of risks and uncertainties, many of which are unforeseeable and
beyond our control.

The factors that could cause actual results to materially differ include,
among others: the impact of significant overcapacity in the highly competitive
commercial printing industry, which creates downward pricing pressure and
fluctuating demand for printing services; the inability of the Company to
reduce costs and improve operating efficiency rapidly enough to meet market
conditions; the impact of electronic media and similar technological changes,
including digital substitution by consumers; the impact of changes in postal
rates, service levels or regulations; the impact of changing future economic
conditions; the failure to renew long-term contracts with clients on favorable
terms or at all; the failure of clients to perform under long-term contracts
due to financial or other reasons or due to client consolidation; the failure
to successfully identify, manage, complete and integrate acquisitions and
investments; the impact of increased business complexity as a result of the
Company’s entry into additional markets; the impact of fluctuations in costs
(including labor-related costs, energy costs, freight rates and raw materials)
and the impact of fluctuations in the availability of raw materials; the
impact of regulatory matters and legislative developments or changes in laws,
including changes in privacy and environmental laws; the impact on the holders
of Quad/Graphics class A common stock of a limited active market for such
shares and the inability to independently elect directors or control decisions
due to the voting power of the class B common stock; the impact of risks
associated with the operations outside of the United States; significant
capital expenditures may be needed to maintain the Company’s platform and
processes and to remain technologically and economically competitive; and the
other risk factors identified in the Company’s most recent Annual Report on
Form 10-K, as such may be amended or supplemented by subsequent Quarterly
Reports on Form 10-Q or other reports filed with the Securities and Exchange

Except as required by the federal securities laws, the Company undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

This press release contains financial measures not prepared in accordance with
generally accepted accounting principles (referred to as Non-GAAP),
specifically Adjusted EBITDA. Adjusted EBITDA is defined as net earnings
(loss) attributable to Quad/Graphics common shareholders plus interest
expense, income tax expense (if applicable), depreciation and amortization,
and restructuring, impairment and transaction-related charges, and less income
tax benefit (if applicable). This measure is presented to provide additional
information regarding Quad/Graphics’ performance and because it is an
important measure by which Quad/Graphics assesses the profitability of its
business. This measure should not be considered an alternative to net earnings
as a measure of operating performance.

About Quad/Graphics

Quad/Graphics (NYSE: QUAD), a leading global printer and media channel
integrator, is redefining print in today’s multichannel media world by helping
marketers and publishers capitalize on print’s ability to complement and
connect with other media channels. With consultative ideas, worldwide
capabilities, leading-edge technology and single-source simplicity,
Quad/Graphics has the resources and knowledge to help its clients maximize the
revenue they derive from their marketing spend through channel integration,
and minimize their total cost of print production and distribution through a
fully integrated national distribution network. The Company provides a diverse
range of print solutions, media solutions and logistics services from multiple
locations throughout North America, Latin America and Europe.

About Brown Printing Company

Brown proudly serves America’s premier publishers and catalogers with
premedia, printing, distribution, and integrated media solutions. Founded in
1957, Brown is a proven industry leader with a client focused culture that
offers customized solutions to meet our clients individual needs. Brown
operates three state-of-the-art manufacturing facilities strategically located
across the United States. We take extreme pride in our people and the
innovative solutions we deliver. Brown’s proven stability, world class
quality, and superior client service make Brown the right partner for your
printing and media solution needs.

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Quad/Graphics Media Contact:
Claire Ho, 414-566-2955
Quad/Graphics Investor Relations Contact:
Kelly Vanderboom, 414-566-2464
Brown Printing Company Media Contact:
Brown Printing
Jennifer Bergin, 212-782-7857
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