RRD to be Acquired by Chatham Asset Management for $10.85 Per Share in Cash
R.R. Donnelley & Sons Company announced that it has entered into a definitive merger agreement (the “Chatham Merger Agreement”) to be acquired by affiliates of Chatham Asset Management, LLC (“Chatham”), a leading private investment firm, in an all-cash transaction with a total enterprise value of approximately $2.3 billion and total equity value of approximately $897 million. RRD also announced that it has terminated its previously announced merger agreement with affiliates of Atlas Holdings LLC (“Atlas”), dated November 3, 2021 (as amended on December 9, 2021, the “Amended Atlas Merger Agreement”), pursuant to which affiliates of Atlas had agreed to acquire RRD for $10.35 per share in cash. The termination of the Amended Atlas Merger Agreement follows the decision by Atlas to waive its contractual opportunity through December 16, 2021 to negotiate an amendment of the Amended Atlas Merger Agreement such that the transaction contemplated by the Chatham Merger Agreement would no longer constitute a “Superior Proposal” as defined in the Amended Atlas Merger Agreement.
The Chatham Merger Agreement has been unanimously approved by the RRD Board of Directors (the "Board”). Under the terms of the Chatham Merger Agreement, an affiliate of Chatham will acquire all of the RRD common stock not already owned by affiliates of Chatham for $10.85 per share in cash. The purchase price represents a premium of 4.8% over $10.35, the price per share of RRD common stock under the Amended Atlas Merger Agreement.
“This transaction, which follows a robust and thorough process, is a recognition of the enormous value created by our talented employees, whose passion and dedication to the success of RRD and our clients has enabled us to achieve this important milestone,” said Dan Knotts, RRD President and Chief Executive Officer. “Under Chatham’s ownership, I expect that RRD will remain an industry leading marketing and business communications company, with enhanced resources and flexibility, to effectively meet the evolving needs of our clients.”
“As a longstanding, supportive investor in RRD, we are pleased to have reached this agreement with the Company. RRD possesses a strong portfolio of assets and capabilities, and we look forward to leveraging our deep understanding of its business, as well as our extensive experience in the print media and related industries, to drive long-term value for all stakeholders,” said Chatham.
Certain Terms, Approvals and Timing
The Chatham transaction is expected to close in the first half of 2022, subject to customary closing conditions, including the approval of RRD stockholders and receipt of regulatory approvals.
The Chatham Merger Agreement contemplates that affiliates of Chatham will finance the transaction through a combination of committed equity financing provided by Chatham and certain of its affiliates and debt financing for which Jefferies Finance LLC and Wells Fargo Capital Finance have provided commitments. The transaction is not subject to a financing condition.
RRD expects to announce a special meeting of stockholders to approve the Chatham transaction at a later date. Chatham and certain of its affiliates, which hold approximately 14.99% of the outstanding shares of RRD common stock, have entered into a voting agreement with RRD, pursuant to which they have agreed, among other things, to vote their shares of RRD common stock in favor of the transaction.
Upon completion of the Chatham transaction, RRD’s shares will no longer trade on the New York Stock Exchange, and RRD will become a private company.
The foregoing description of the Chatham Merger Agreement and the transactions contemplated thereby is subject to, and is qualified in its entirety by reference to, the full terms of the Chatham Merger Agreement, which RRD will be filing with the U.S. Securities and Exchange Commission (the “SEC”) on Form 8-K. References herein to terms of the Amended Atlas Merger Agreement are subject to, and are qualified by reference to, the full terms of the Amended Atlas Merger Agreement, which RRD filed with the SEC on Form 8-K on November 4, 2021 and December 10, 2021.
The preceding press release was provided by a company unaffiliated with In-plant Impressions. The views expressed within do not directly reflect the thoughts or opinions of In-plant Impressions.