RR Donnelley & Sons said it would break into three companies. The stock closed up 48 cents, or 2.8%. CEO Thomas Quinlan III told investors during an investor call that the company will split its operations serving the financial printing business, its arm serving retail publishers and merchandisers, and its commercial printing and logistics business that works with large corporations.
RR Donnelley is the largest U.S. commercial printer, with about $11.7 billion in sales. The stock gained 86 cents, or about 4.9%, to $18.37 on Tuesday morning, pushing its market cap to $3.8 billion.
Quinlan said that breaking apart the Chicago group would provide each unit with greater strategic flexibility and create more transparency for investors into the performance of each division. One of the three companies will focus on financial communications, another on publishing and retail-centric print services, and the third will focus on customized multi-channel communications management.
“We see a significant opportunity to unlock value by allowing these three businesses to pursue their own strategies and invest according to the unique dynamics of their respective industries,” CEO Thomas Quinlan III said in a statement.
“Each company will have the strategic focus, management resources and capital structure to enable it to strengthen its market position and pursue its growth opportunities, enhancing long-term value for stakeholders,” Quinlan added.
RR Donnelley & Sons expects that the spinoff will be completed by the end of next year. Once the transaction is finished existing RR Donnelley shareholders will immediately own shares in the three new companies, FinancialCo, PRSCo., andCMCo.
Source: The Street.com