Exhibit 99.1
LSC Communications Comments on DOJ Action Regarding Proposed Transaction with Quad
CHICAGO, IL, June 20, 2019 — LSC Communications, Inc. (NYSE: LKSD) (“LSC Communications”), a leader in print and digital media solutions, today announced that the U.S. Department of Justice (“DOJ”) filed a lawsuit in the United States District Court for the Northern District of Illinois to enjoin Quad’s proposed acquisition of LSC Communications. The companies believe that the DOJ has reached the wrong conclusion in its assessment of the transaction and LSC will join Quad in vigorously defending the lawsuit in court.
Contrary to the DOJ’s position, the benefits and synergies to be realized from the proposed acquisition arepro-competitive and will benefit the companies’ clients for the following reasons:
| | • | | There is significant excess capacity in the printing industry today and this transaction would improve efficiencies and lower printing costs; |
| | • | | Many printers have the capability to print the same jobs as LSC Communications or Quad and successfully compete with both companies on quality and price; |
| | • | | Barriers to expansion and entry in the printing business are low and printers can easily expand their production capacity through acquisitions or with modest capital expenditures on equipment and facilities that are readily available; and |
| | • | | The trend toward digital substitution increases competition and disincentives price increases. |
“We believe that the DOJ is wrong in its assessment of our transaction and that its action is counterproductive, especially in the context of the industry trends and continued consolidation. We continue to believe that our proposed combination will provide an overall more efficient experience for our clients,” said Thomas J. Quinlan III, LSC Communications Chairman, Chief Executive Officer and President. “As we move forward, we will continue to be focused on serving our clients’ needs with the same level of service, innovation, and industry leading solutions that they have come to expect. We remain fully committed to this transaction and believe that this is the best path forward for our company and all of our stakeholders.”
Theall-stock transaction was announced on October 31, 2018, and was approved by shareholders of both companies on February 22, 2019.
At this time, the companies are unable to predict the timeframe for completion of the litigation or closing of the transaction.
Notes Regarding Forward-Looking Statements
This communication contains forward-looking statements within the meaning of federal securities laws regarding Quad/Graphics and LSC Communications. These forward-looking statements relate to, among other things, the proposed transaction between Quad/Graphics and LSC Communications and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of Quad/Graphics and LSC Communications. In accordance with “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, these statements are accompanied by cautionary language identifying important factors, though not necessarily all such factors that could cause future outcomes to differ materially from those set forth in the forward-looking statements. You can identify forward-looking statements by words such as “anticipate,” “believe,” “could,” “design,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “imply,” “intend,” “may”, “objective,” “opportunity,” “outlook,” “plan,” “position,” “potential,” “predict,” “project,” “prospective,” “pursue,” “seek,” “should,” “strategy,” “target,” “would,” “will” or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies’ control and are difficult to predict. Factors that could cause Quad/Graphics’ or LSC Communications’ actual results to differ materially from those implied in the forward-looking statements include: (1) the
