Cenveo Inc. To Purchase Cadmus Communications for $430 million

Digital printing company Cenveo announced on Wednesday that it will buy Cadmus Communications, another digital printing services provider, for $430 million. The merger will create the third largest graphics services company in the U.S. with revenue of over $2 billion. The purchase is valued at $24.75 a share in cash, an 18% premium over Cadmus' Tuesday closing price of $20.98. Analysts are pleased with the acquisition as it will provide Cenveo with entry into more specialized areas of the industry, including packaging and niche journal and magazine production. Cadmus' FY05 revenue was about $450 million, while Cenveo generated $1.75 billion for 2005. Layoffs are expected at the corporate level where more jobs will become redundant, but less downsizing is anticipated in operations. Cadmus stock climbed over 17% to $24.55 on Wednesday, after touching a year high of $24.66. Cenveo shares increased over 9% to $21.67.

• Sources: Reuters, MarketWatch.com, InformationWeek
• Related commentary: Other articles on Mergers & Acquisitions
• Potentially impacted stocks and ETFs: Cenveo (CVO, Cadmus (CDMS) Competitors: Ennis Inc. (EBF), CSS Industries (CSS), The Standard Register Company (SR)

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