LINCOLNSHIRE, Ill.,
May 1, 2012 /PRNewswire/ -- ACCO
Brands Corporation (NYSE: ACCO), a world leader in branded office
products, today completed the merger with MeadWestvaco's (NYSE:MWV)
Consumer & Office Products business. The transaction
brings popular brands such as Mead®, Five Star®, Trapper Keeper®,
AT-A-GLANCE®, Cambridge®, Day Runner®, Hilroy®, Tilibra® and
Grafon's™ into ACCO Brands' industry-leading product portfolio.
"The combination of our businesses creates a powerhouse of
complementary brands and products that we will be able to market
across all relevant channels, including mass market retail, office
super stores, independent and wholesale office products dealers,
and e-commerce outlets," said Robert J.
Keller, chairman and chief executive officer of ACCO Brands
Corporation. "We are also significantly diversifying our
global footprint. Our new colleagues from the legacy Mead
business bring talent and expertise that will contribute to
anticipated future growth, and we warmly welcome them into the ACCO
Brands family."
The addition of MeadWestvaco's Consumer & Office Products
business increases ACCO Brands' 2011 revenues by more than 50
percent on a pro-forma basis, with approximately 80 percent of
sales of the combined businesses coming from category-leading
brands. On a pro-forma basis, the combined company's revenue
for 2011 was $2.1 billion.
Going forward, the merger is expected to:
- Immediately add to ACCO Brands' earnings per share;
- Yield approximately $20 million
of annualized cost synergies;
- Enhance ACCO Brands' gross profit and operating income
margins;
- Enable ACCO Brands to re-capitalize its balance sheet and
increase its interest coverage ratio, and accelerate balance-sheet
deleveraging;
- Significantly enhance cash flow generation;
- Increase scale in the mass merchandise channel, providing
greater consumer access and cost leverage;
- Bring greater consumer insight and category management
capabilities to the combined entity;
- Provide ACCO Brands with a $180
million sales leadership position in Brazil, and double ACCO Brands' sales volume
in Canada; and
- Add important new brands and products in key categories to ACCO
Brands' existing portfolio of top-selling brands.
Financial Benefit for ACCO Brands Corporation
Shareholders
This transaction delivers an opportunity for ACCO Brands
shareholders to invest in an industry-leading portfolio of top
brands and products. The merger creates a larger, more profitable
business that is a leader in its industry. The merger is also
immediately accretive to earnings per share (EPS).
Assuming MeadWestvaco's Consumer & Office Products
business had been owned by ACCO Brands Corporation for the full
year 2011, the company would have combined sales of approximately
$2.1 billion and GAAP operating
income of approximately $204 million,
with the potential for an additional benefit of approximately
$20 million from cost synergies on an
annualized basis. In addition to the synergies noted
above, the GAAP pro forma operating income includes approximately
$19 million of MeadWestvaco corporate
cost allocations that will not be acquired by ACCO Brands, and a
further $8 million of inventory
step-up amortization. Pre-synergies, the combination is
expected to be accretive to 2012 adjusted earnings per share (EPS),
excluding merger and transaction-related costs. The merger is
expected to significantly increase annual cash flow and accelerate
the ability to deleverage ACCO Brands' balance sheet. Net
leverage is projected to drop below 3x in 2013. (Note: All
figures provided are unaudited.)
Transaction Details
The separation and acquisition of the Consumer & Office
Products business from MeadWestvaco Corporation was structured as a
"Reverse Morris Trust" transaction. Under the terms of the
separation and merger agreements, MWV established a new subsidiary
to which it conveyed the C&OP business in return for
$433 million on a tax-free basis.
The shares of the new subsidiary were then distributed to
MWV's shareholders as a stock distribution dividend.
Immediately after the spin-off and distribution, the newly
formed company merged with and into a subsidiary of ACCO Brands and
MWV shareholders received one share of ACCO Brands common stock for
every three shares of stock they received in the stock dividend
distribution. The merged company will subsequently merge with
Mead Products LLC, the surviving corporate entity, a subsidiary of
ACCO Brands Corporation.
Leadership and Approvals
The combined business will be managed by ACCO Brands' senior
executive team and board of directors, to which will be added two
new directors selected by MeadWestvaco Corporation and approved by
the ACCO Brands board. In addition, senior executives of the
MeadWestvaco Consumer & Office Products business have joined
the ACCO Brands management team. ACCO Brands' headquarters
will remain in Lincolnshire,
Illinois until its planned relocation to Long Grove, Illinois in 2013.
The transaction was approved by ACCO Brands shareholders on
April 23, 2012.
About ACCO Brands Corporation
ACCO Brands Corporation is one of the world's largest suppliers
of branded office and consumer products and print finishing
solutions. Our widely recognized brands include AT-A-GLANCE®,
Day-Timer®, Five Star®, GBC®, Hilroy®, Kensington®, Marbig, Mead®,
NOBO, Quartet®, Rexel, Swingline®, Tilibra®, Wilson Jones® and many
others. We design, market and sell products in more than 100
countries around the world. More information about ACCO
Brands can be found at www.accobrands.com.
Forward-Looking Statements
This press release contains certain statements which may
constitute "forward-looking statements" as that term is defined in
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to certain risks and
uncertainties, are made as of the date hereof and we assume no
obligation to update them. Because actual results may differ from
those predicted by such forward-looking statements, you should not
place undue reliance on them when deciding to buy, sell or hold the
ACCO Brands' securities. Among the factors that could cause
our plans, actions and results to differ materially from current
expectations are: fluctuations in the cost and availability of raw
materials; competition within the markets in which the company
operates; the effects of both general and extraordinary economic,
political and social conditions, including any volatility and
disruption in the capital and credit markets; the effect of
consolidation in the office products industry; the liquidity and
solvency of our major customers; our continued ability to access
the capital and credit markets; the dependence of the company on
certain suppliers of manufactured products; the risk that targeted
cost savings and synergies from business combinations may not be
fully realized or take longer to realize than expected; future
goodwill and/or impairment charges; foreign exchange rate
fluctuations; the development, introduction and acceptance of new
products; the degree to which higher raw material costs, and
freight and distribution costs, can be passed on to customers
through selling price increases and the effect on sales volumes as
a result thereof; increases in health care, pension and other
employee welfare costs; as well as other risks and uncertainties
detailed in the company's Annual Report on Form 10-K for the year
ended December 31, 2011, under Item
1A, "Risk Factors," and in the company's other SEC filings.
Forward-looking statements relating to the merger involving ACCO
Brands and the Consumer & Office Products business (the
"C&OP Business") of MeadWestvaco Corporation include, but are
not limited to, statements about the benefits of the proposed
merger, including future financial and operating results and
synergies; ACCO Brands' plans, objectives, expectations and
intentions; and other statements relating to the merger that are
not historical facts. With respect to the merger, important
factors could cause actual results to differ materially from those
indicated by such forward-looking statements, including, but not
limited to, the risk that anticipated cost savings, growth
opportunities and other financial and operating benefits as a
result of the transaction may not be realized or may take
longer to realize than expected; the risk that benefits from the
transaction may be significantly offset by costs incurred in
integrating the companies; potential adverse impacts from incurring
additional indebtedness; and difficulties in connection with the
process of integrating the C&OP Business with ACCO Brands,
including: coordinating geographically separate organizations;
integrating business cultures, which could prove to be
incompatible; difficulties and costs of integrating information
technology systems; and the potential difficulty in retaining key
officers and personnel. These risks, as well as other risks
associated with the merger, are more fully discussed in the proxy
statement/prospectus included in the registration statement on Form
S-4 that ACCO Brands filed with the United States Securities and
Exchange Commission ("SEC") on March 22,
2012 in connection with the merger.
Pro Forma Information
The unaudited pro forma combined financial data provided herein
are not intended to represent or be indicative of the consolidated
results of operations or financial condition of the combined
company that would have been reported had the merger been completed
as of the dates presented, and further should not be taken as
representative of the future consolidated results of operations or
financial condition of ACCO Brands. The pro-forma financial
information contained herein is derived from, and is subject to the
assumptions and limitations associated with, the unaudited pro
forma combined financial information contained in the Form S-4 that
ACCO Brands filed with the SEC on March 22,
2012 in connection with the merger.
For further information:
Rich
Nelson
|
Jennifer
Rice
|
Media
Relations
|
Investor
Relations
|
(847)
484-3030
|
(847)
484-3020
|
SOURCE ACCO Brands Corporation