Cenveo to buy Cadmus Communications for $430 million

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Digital printer Cenveo Inc. will acquire Cadmus Communications Corp. for $430 million.  The deal, the firms said, will create one of the leading graphic communications companies in North America.

"Cadmus is company that I have known and respected for many years in the industry," said Robert G. Burton, chairman/CEO of Cenveo, in a conference call announcing the acquisition. "I really feel they are a quality printer in this specially niched kind of market. Their plant locations and customers are just outstanding and fit very well with Cenveo."

Under the deal, Cenveo will acquire all of the shares of Cadmus for $24.75 per share in cash. The agreement has been unanimously approved by the boards of directors of both companies and is expected to close in the first quarter of 2007.

Mr. Burton said Cadmus was one of four or five printers that Cenveo was thinking about acquiring.

The acquisition is expected to be accretive to Cenveo's earnings and is subject to customary closing conditions, including regulatory approval and approval of Cadmus' shareholders.

Mr. Burton said Cadmus is a lot like other companies in the printing industry in "that they have done a terrific job over an extended period of time, but they are just too small to be a real player in the marketplace and we are delighted that we are going to have an opportunity to have them on our time."

Headquartered in Richmond, VA, Cadmus has 3,300 employees and is the world's largest provider of content management and production services to scientific, technical and medical journal publishers. It is the fifth largest periodicals printer in North America, and it is a leading provider of specialty packaging and promotional printing services.

In the year ended June 30, 2006, Cadmus had revenue of more than $450 million.

Bruce V. Thomas, Cadmus' president/CEO, and entities affiliated with Nathu R. Puri, Cadmus' largest shareholder, have agreed to vote in favor of the deal as part of an agreement with Cenveo.

Cadmus' board unanimously approved the merger agreement and is recommending that Cadmus' shareholders approve the transaction.

Cenveo, headquartered in Stamford, CT, has 6,550 employees, and had sales of about $451 million in the last 12 months. It has two major operations. The commercial printing operation has 27 manufacturing facilities while its envelopes-forms-labels unit has 37 manufacturing facilities.

The acquisition will allow Cenveo to extend Cadmus' leading position in the scientific, technical and medical journal market as well as its short-run publication expertise.

Also, the combination will create a global leader in the specialty packaging business by combining Cadmus' global network with Cenveo's existing North American platform.

"We feel [Cadmus'] operations are a perfect complement to Cenveo's product line, and will create some immediate cross-selling opportunities for both companies'," Mr. Burton said. "We wanted to be in markets that not a lot of other people were in, and the envelopes, label and commercial-kind of platform we've had here all along has been successful for us and produced the kind of results we've generated this year.

"Now, when you add the journals and the short-run [publications] and the packaging to that, you really have a lot of complementary businesses here," he said. "We feel the deal is positive in terms of the product line and the management."

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