January 21, 2007 / 4:14 AM / 12 years ago

Cenveo to buy Cadmus

(Reuters) - Cenveo Inc. CVO.N agreed to acquire Cadmus Communications Corp. CDMS.O for about $237 million in cash to become the third-largest graphic services provider in North America.

Cenveo will pay $24.75 for each Cadmus share, representing a premium of 18 percent over the stock’s Tuesday closing price.

Including assumption of debt, the deal is valued at about $430 million, the companies said. “The debt is about $193 million,” Paul Suijk, Cadmus’ chief financial officer said over the telephone.

The deal is expected to add to Cenveo’s earnings. Cenveo expects annualized cost savings of at least $20 million in the first 12 months after the closing of the transaction.

Cenveo said the chief executive of Cadmus, Bruce Thomas, as well as entities associated with its largest shareholder, Nathu Puri, have agreed to vote in favor of the deal.

Cenveo said the acquisition will allow it to expand upon Cadmus’ position in the scientific, technical, and medical journal market, as well as its short-run publication expertise.

The deal is expected to close in the first quarter of 2007. The combined company expects revenue over $2 billion. Cadmus had reported net sales of $451.4 million for fiscal 2006.

Shares of Cadmus rose over 17 percent to $24.55 in afternoon trade, after touching a year high of $24.66 intraday, on the Nasdaq. Cenveo shares were up more than 9 percent at $21.67 on the New York Stock Exchange.

Reporting by Dilipp S. Nag in Bangalore

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