LSC Communications looks at sale options

Jo Francis
Wednesday, April 29, 2020

US print giant LSC Communications has appointed investment bankers to explore a sale of the business that could see it broken up.

LSC Communications: four segments could be sold separately
LSC Communications: four segments could be sold separately

The $3.3bn turnover (£2.7bn) business filed for Chapter 11 bankruptcy protection a fortnight ago.

At the time chief executive Thomas Quinlan said that the firm was pursuing a restructuring “through a voluntary process as we continue to work with our lenders to best position our business for the future.”

Printweek can reveal that LSC has hired investment banking firm Evercore to “explore a sale of the company or the four segments separately” under the codename “Project Libra”.

The four segments identified are: books; magazines, catalogues and logistics; office products and its Mexican printing and distribution business.

LSC’s operations in Mexico and Canada are excluded from the Chapter 11 filing.

LSC claims a market leading position as the largest book printer and publishing services provider in the US, with $1.1bn in sales in that area. It prints for eight of the top ten book publishers globally. 

Its magazines, catalogues and logistics business has sales of $1.6bn.

Office products is a $500m business, while Mexico is ~$100m.

However, the group has short- and long-term debt of more than $900m. In its Q4 2019 results it reported net sales down 17.1% at  $778m, with ‘organic’ sales adjusted for foreign exchange and pass-through paper sales down 14.1%. The net loss for the period ballooned to $169m, compared to a $16m loss the prior year. 

One industry CEO commented: “It’s a feast of many different flavours – if anyone is brave enough, rich enough and good enough.

“More likely the value is in breaking it up, there are some very different businesses in there and within each of the three US parts there will be good and bad, including plenty of good. But even split down – who is going to fund it?”

In March LSC instigated a ‘poison pill’ arrangement to thwart any potential hostile takeover “without paying all stockholders a premium for that control”.

Its proposed mega-merger with fellow US print behemoth Quad Graphics was called off last summer.


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