In a statement released today (18 February) alongside its full-year results for the period ending 31 December 2021, the US-headquartered multichannel marketing and business services group said the transaction, which will see Chatham – its largest investor – acquire all of the outstanding shares of RRD common stock that it does not already own for $10.85 (£7.97) per share in cash, is progressing.
“Necessary regulatory approvals for the transaction have been obtained, and, subject to the stockholder vote scheduled for February 23, 2022, the transaction is expected to close expeditiously thereafter and as soon as February 25, 2022,” RRD stated.
“Once the transaction closes, RRD’s shares will no longer trade on the New York Stock Exchange, and RRD will become a private company.”
For the full-year, RRD posted net sales of $4.96bn, up 4.1% on the $4.77bn it achieved in 2020. This included Q4 sales of $1.38bn, up 2.1% on the $1.35bn figure recorded in Q4 2020.
Its income from continuing operations before income taxes was $48.7m for the full-year, compared to a $15.9m loss in 2020, although the Q4 figure was $11.8m, compared to a Q4 2020 figure of $46.4m.
RRD had total debt outstanding of $1.47bn as of 31 December 2021, down $37m from the prior year end. It said pension and OPEB (other post-employment benefits) plans were overfunded by $42m as of 31 December 2021, which is an improvement of $146m from the $104m underfunded amount at the prior year end.
Cash provided by operating activities in 2021 was $92.1m, compared to $149.8m in the prior year period. RRD said current year results include “payments in excess of $100m related to the planned merger”, settlement of LSC bankruptcy related claims, repayment of half the payroll taxes deferred in 2020, and payments made to terminate certain interest rate swap agreements.
“We delivered a strong year of performance capped by fourth quarter results that exceeded our expectations. I am proud of the RRD team as we continue to successfully execute our strategy and navigate through the Covid-19 pandemic,” said RRD president and CEO Dan Knotts.
“Our full year 2021 adjusted income from operations and operating margin represent our third consecutive year of improved performance, while also representing our best performance in those metrics since 2016.
“We have remained laser focused on executing our strategic priorities and have a business that is consistently delivering profitable growth and improving margins through organic sales growth and a leaner cost structure.
“In addition, our balance sheet is in its best shape since the spin in 2016 [when the old RR Donnelley & Sons group was split up into three companies].
“I would like to thank our 32,000 employees for their many contributions and dedication to deliver the high level of business performance we have today for our stockholders. RRD is well positioned for continued success under the expected future ownership of Chatham Asset Management.”
The unnamed “strategic buyer” that had made an unsolicited non-binding bid to acquire RR Donnelley for $11.50 per share in cash withdrew its offer earlier this month, providing no specific reasons for doing so.
Shares in RRD closed at $10.75 yesterday, down by 0.28%, and had a pre-market price today of $10.76.
