Quad/Graphics completes acquisition of Brown Printing, saying addition will enhance services to publishers and marketers, control costs of print product distribution

SUSSEX, Wisconsin and WASECA, Minnesota , May 30, 2014 (press release) – Quad/Graphics, Inc. (NYSE: QUAD) ("Quad/Graphics") announces the completion of its acquisition of Brown Printing Company ("Brown") for a net purchase price of $100 million. Quad/Graphics used cash on hand and drew on its revolving credit facility to finance the acquisition.

The Company expects the acquisition of Brown will enhance the many ways it helps publishers and marketers drive top-line revenues while better controlling their overall total cost of print production and distribution.

"Brown is an ideal fit with Quad/Graphics and the acquisition supports our ongoing strategy to transform both our company and the industry to create value for our clients, employees and shareholders," said Joel Quadracci, Chairman, President & CEO. "As Brown's employees and operations join our worldwide platform, Quad/Graphics is better positioned than ever to help magazine publishers and catalog marketers capitalize on the power of print and integrated media solutions to further drive results. I am excited to welcome Brown employees and clients to Quad/Graphics’ family and begin working as one combined company."

Mike Amundson, Brown's President and CEO, added: "I am confident there is no better home for Brown’s employees and clients than Quad/Graphics. We fit well together, sharing a similar corporate culture and values system, a passion for innovation, and a commitment to providing our clients exceptional service and quality. In my opinion, our newly combined enterprise will offer publishers and marketers the best options for revenue-generating and cost-saving solutions."

Quad/Graphics expects Brown to generate approximately $350 million in revenues during fiscal year 2014 and that the acquisition will be accretive to earnings with a purchase price multiple less than four times Adjusted EBITDA. The combined entity will realize efficiencies and cost-savings through a superior and more efficient operating platform and procurement programs.

"Now that the acquisition is complete, we will move forward quickly to integrate Brown's operations with our own while keeping a sharp focus on performance for both new and existing clients," Quadracci said. "Given the many similarities between our companies -- including a culture of employee empowerment, innovation and doing right by our clients -- we anticipate a smooth integration process. Clients will benefit from our commitment to performance excellence."

The combined company employs more than 25,000 employees and operates more than 70 print-production facilities worldwide.

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

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 Commission.

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.

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