Quad/Graphics completes acquisition of Transcontinental's Mexican assets, strengthens presence in Latin America, plans 10,000 square foot expansion of acquired Toluca, Mexico, facility

SUSSEX, Wisconsin , September 8, 2011 (press release) – Quad/Graphics Inc. (NYSE: QUAD) is pleased to announce that it has completed the acquisition of the Mexican assets of Transcontinental Inc. (TSX: TCL.A, TCL.B, TCL.PR.D) following final approval of all required regulatory authorities, including the Mexican Federal Law on Economic Competition.

“We’re pleased to advance our interests in Mexico and become the country’s leading printer of magazines, retail inserts, catalogs, books and directories”

“We’re pleased to advance our interests in Mexico and become the country’s leading printer of magazines, retail inserts, catalogs, books and directories,” said Joel Quadracci, Quad/Graphics Chairman, President & CEO. “This acquisition supports our strategy to grow profitably in geographies and segments where we can be a market leader through a diverse product offering, and a superior and efficient operating platform. Mexico is a logical place to put down stronger roots. With publishers and marketers - both in Mexico and other parts of the world - eager to reach this emerging market’s large and growing population, we have the talent, technology and innovative solutions to help them achieve their business goals through the power of print.”

Quad/Graphics now has operations in five Mexican cities: Toluca, Querétaro, Azcapotzalco, Xochimilco and Tlalnepantla. Year 2011 proforma revenues for the combined company are forecasted to be approximately $115 million.

“Finalizing this deal represents a significant step toward realizing our goal of creating the most efficient, productive and integrated printing platform in Latin America,” said Tony Scaringi, President & General Manager of Latin America. “With facilities in Mexico, Argentina, Brazil, Chile, Colombia and Peru, we are better positioned than any other printer to deliver value throughout Latin America.”

Quad/Graphics’ leadership team in Mexico includes Roberto Sierra, General Manager of Mexico, and Martin Vallebona, General Manager of Querétaro. Sierra, who comes to the Company from Transcontinental, is responsible for operations at the Company’s magazine, catalog and retail insert facilities in Toluca, Azcapotzalco, Tlalnepantla and Xochimilco. Vallebona continues in his role as General Manager of Querétaro, a book manufacturing facility. “I am energized by the experience and knowledge these two professionals bring to our team,” Scaringi said.

As the Company begins its integration, it will break ground on a building expansion for paper roll and work-in-process storage at its Toluca facility. Once complete, the approximately 900-square-meter (10,000-square-foot) expansion will enable the Company to install additional press and finishing equipment.

Simultaneous with the closing of this acquisition, Quad/Graphics has also acquired the portion of Transcontinental’s black-and-white and two-color book printing business destined for U.S. export. The work will be absorbed into Quad/Graphics’ existing network of book printing plants.

Quad/Graphics’ intent to acquire Transcontinental’s Mexican assets and a portion of its book printing business was announced on July 13, 2011, as part of a definitive agreement that also included Quad/Graphics selling its Canadian operations (with the exception of Quad/Graphics’ Vancouver, B.C., facility) to Transcontinental. Transcontinental’s acquisition of Quad/Graphics’ Canadian operations is still awaiting final regulatory approval. Transcontinental was informed by the Competition Bureau of Canada that it requires additional information in order to complete its review of the proposed transaction. Under the Competition Act, the period during which the parties may not complete the transaction has been extended until 30 days after providing the Competition Bureau with the additional information it has requested. Both parties have been cooperating with the Competition Bureau since the announcement of the transaction, and they expect to be able to comply with the request for additional information in a timely manner. Given the scope and complexity of the parties’ businesses, the issuance of a request for additional information is not unusual.


About Quad/Graphics

Quad/Graphics (NYSE: QUAD) is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 24,000 full-time equivalent employees working from more than 60 print-production facilities as well as other support locations throughout the United States, Canada, Latin America and Europe. As a printing industry innovator, Quad/Graphics (www.QG.com) is redefining the power of print in today’s multimedia world by helping its clients use print as the foundation of multichannel communications strategies to drive their top-line revenues.

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