KKR AND DLJ MERCHANT BANKING PARTNERS TO CREATE
SPECIALTY PRINTING AND MARKETING SERVICES ENTERPRISE
UNDER THE LEADERSHIP OF INDUSTRY VETERAN MARC
L. REISCH
Transaction, Valued at $2.2 Billion, Includes
Recap of Jostens and Acquisitions of Von Hoffmann
and Arcade Marketing
With Leading Market Positions, Company Will
Be Poised To Grow Organically
and Through Acquisitions
NEW YORK, July 21, 2004 –
Kohlberg Kravis Roberts & Co. (KKR) and
DLJ Merchant Banking Partners, an affiliate
of Credit Suisse First Boston’s Alternative
Capital Division (DLJMBP), today announced a
series of transactions with an aggregate value
of approximately $2.2 billion that will create
a unique specialty printing and marketing services
enterprise under the leadership of industry
veteran Marc L. Reisch. The transactions encompass
the recapitalization of Jostens and the acquisitions
of Von Hoffmann and Arcade Marketing, all three
companies leaders in their respective markets
and currently owned by DLJMBP.
Mr. Reisch, a veteran executive who has been
highly successful in growing specialty printing
and marketing services businesses, has been
working with KKR over the past several years
to find the right opportunity to create a platform
for organic and M&A growth within these
sectors. He is currently a senior advisor of
KKR and the Chairman of Yellow Pages Group,
Canada’s largest telephone directories
publisher. He formerly served as the Chairman
and CEO of the North American division of Quebecor
World Inc., one of the largest commercial printers
in the world. He joined Quebecor World following
its 1999 acquisition of World Color Press, a
KKR portfolio company where he served as the
President and Chief Operating Officer for many
years. In that capacity, he played an integral
role in the substantial growth of World Color
into the second-largest U.S. printer during
KKR’s ownership period.
The newly created company will consist of three
leaders in specialty printing and marketing
services:
- Jostens, Inc., the market
leader in yearbooks, class rings, and graduation
products;
- Von Hoffmann Corporation,
leading printer of educational textbooks and
supplemental materials and its subsidiary
Lehigh Press, which specializes in book components
and direct marketing print services through
Lehigh Direct; and
- Arcade Marketing, the
leading printer and manufacturer of sampling
products for the fragrance, cosmetics, consumer
products, and food and beverage industries.
On a combined basis these businesses generated
sales in excess of $1.4 billion in the last
twelve months ended March 31, 2004.
The transaction will include KKR’s acquisition
of Von Hoffmann and Arcade and the contribution
of Von Hoffmann and Arcade to Jostens Holdings
in exchange for stock of Jostens Holdings, which
will then be recapitalized. Upon completion
of these transactions, KKR and DLJMBP will each
own a 45% stake of Jostens Holdings, which will
be renamed. The remaining 10% stake will be
held by the management team as well as a small
group of existing minority investors in Jostens.
The new company will be well capitalized and
consist of three operating companies, each with
its own strong brand identity, market strategy,
and customer relationships.
Mr. Reisch, who will be Chairman and CEO of
the new company, said, “After looking
at numerous opportunities, KKR and I decided
to approach DLJMBP with this creative structure
for combining three strong assets into one growth
enterprise. We believe there is tremendous opportunity
to build a specialty printing and marketing
services company that takes advantage of significant
cost benefits from combined scale, but that
is focused on both organic and acquisition growth.
Jostens, Von Hoffmann, and Arcade will each
have its own management team and business plan
to address a distinct customer base. I am delighted
that my long-term relationship with KKR has
led to this opportunity, and I am pleased to
have the chance to work with DLJMBP as well
as the management and employees of Jostens,
Von Hoffmann, and Arcade.”
Alexander Navab, a KKR Partner, said, “We
are excited to be bringing together three industry
leaders in the specialty printing and marketing
services space. This is a very attractive investment
opportunity for us, with strong brand franchises
in industry sectors KKR knows well. We are enthusiastic
about the opportunities for both organic and
acquisition growth over the long term. We are
also partnering with a world class manager in
Marc Reisch, who has been instrumental in creating
significant value for customers, employees,
and shareholders of World Color Press and Yellow
Pages Group, two very successful KKR investments.
We are fortunate to be working with him again
and look forward to our partnership with DLJMBP
as we create a unique enterprise with strong
fundamentals and favorable outlook.”
Thompson Dean, the Managing Partner of DLJ
Merchant Banking Partners, said, “We think
this is a terrific opportunity to build an exciting
platform of specialty printing and marketing
services companies under the leadership of a
proven industry leader. We look forward to partnering
with Marc Reisch and KKR to drive future growth
and value for all stakeholders.”
The transactions are expected to close this
Fall and are subject to customary closing conditions.
Weil, Gotshal & Manges LLP served as legal
counsel to DLJMBP and Simpson Thacher &
Bartlett served as legal counsel to KKR.
About Jostens
Jostens, www.jostens.com,
is a provider of products, programs, and services
that help people celebrate important moments,
recognize achievements, and build affiliation.
The Company's products include yearbooks, class
rings, graduation products, school photography,
and products for athletic champions and their
fans. Through tradition and technology, innovation,
and partnerships, Jostens continues to create
powerful new ways for people to express their
pride and commemorate life's biggest moments.
The company was founded in 1897 and is based
in Minneapolis, Minnesota.
About Von Hoffmann
Von Hoffmann Corporation is a leading North
American manufacturer of printed products for
the educational and commercial markets. For
100 years, the Von Hoffmann name has been synonymous
with outstanding quality in printing and print
related services. With approximately 2,375 employees
and nine facilities throughout the United States,
Von Hoffmann is committed to offering its core
customers a full range of products and services
from design and prepress through manufacturing
and distribution and fulfillment. Von Hoffmann
is headquartered in St. Louis, Missouri. For
more information, visit www.vonhoffmann.com.
About Arcade Marketing
ARCADE Marketing, www.arcadeinc.com,
is the pioneering leader in Multi-Sensory Advertising
and Interactive Sampling Systems, with a 100-year
history of innovation and excellence in service
to the Fragrance, Cosmetic, Consumer Packaged
Goods, and Food & Beverage industries. Its
27 technologies and 60 patents include its ScentStrip®
sampler, as well as LiquaTouch®, DiscCover®,
BeautiSeal®, ShadeSeal®, and many others,
all designed to increase sales and generate
greater brand recall. The Company is headquartered
in New York City.
About KKR
KKR is one of the world’s oldest and most
experienced private equity firms specializing
in management buyouts, with offices in New York,
Menlo Park, California, and London, England.
For more information, please visit www.kkr.com.
About DLJ Merchant Banking Partners
DLJ Merchant Banking (DLJMB) is a leading private
equity investor that has a 19 year record of
investing in leveraged buyouts and related transactions
across a broad range of industries. DLJMB, with
offices in New York, London, Houston and Buenos
Aires, is part of Credit Suisse First Boston's
Alternative Capital Division (ACD), which is
one of the largest alternative asset managers
in the world with more than $33 billion of assets
under management. ACD is comprised of $17 billion
of private equity assets under management across
a diverse family of funds, including leveraged
buyout funds, mezzanine funds, real estate funds,
venture capital funds, fund of funds and secondary
funds, as well as more than $16 billion of assets
under management through its hedge fund (both
direct and fund of funds), leveraged loan and
CDO businesses.
Contacts:
For KKR
Ruth Pachman / Molly Morse
Kekst and Company
212-521-4891 / 4826
For DLJ Merchant Banking Partners
Pen Pendleton
Credit Suisse First Boston Private Equity
212-325-2590
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