UPDATE 2-RR Donnelley to buy Bowne for $481 million

(Adds analyst comments)

By Sudipto Ganguly

BANGALORE Feb 24 (Reuters) - Printing services firm RR Donnelley & Sons Co (RRD.O) has agreed to acquire Bowne & Co Inc BNE.N, which helps companies print regulatory filings, for $481 million.

RR Donnelley, which prints everything from magazines and catalogs to financial reports and newspaper inserts, offered $11.50 a share -- 65 percent more than Bowne stock's closing price on Tuesday.

Shares of Bowne soared about 60 percent to $11.14 in morning trade on the New York Stock Exchange, close to the offer price, while shares of Chicago-based RR Donnelley rose 4 percent to $21.26 in afternoon trade on Nasdaq.

"I think the transaction is a catalyst for further consolidation in the printing industry," CJS Securities analyst Charles Strauzer said. The analyst expects job cuts at both companies following the deal.

New York-based Bowne helps businesses produce and manage their shareholder, investor, marketing and business communications.

"Bowne is an exceptional fit with RR Donnelley. This combination satisfies all of the strategic imperatives that we evaluate as we consider acquisitions," RR Donnelley Chief Executive Thomas Quinlan said in a statement on Tuesday.

The all-cash deal would help expand RR Donnelly's product portfolio and add Bowne's customers to the fold, the companies said in a joint statement late Tuesday.

"There is significant overlap in what they do, so there should be significant cost saving opportunities. The deal makes a lot of sense from both a financial and strategic perspective," CJS' Strauzer said. CJS Securities may pursue investment banking fees from RR Donnelley in the next few months.

The acquisition is expected to add to RR Donnelley's earnings in the first year after its completion, which is likely in the second half of 2010.

In May 2009, RR Donnelley had offered to buy the assets and properties of Quebecor World IQW.TO for about $1.5 billion but was rebuffed by the Canadian company. Last month, privately held U.S. commercial printing company Quad/Graphics Inc acquired Quebecor World, which is now known as World Color Press WC.TO after emerging from bankruptcy protection in mid-2009. (Additional reporting by Saumyadeb Chakrabarty; Editing by Gopakumar Warrier)