(Reuters) - Printing services firm Quad/Graphics Inc (QUAD.N) said on Wednesday it would buy peer LSC Communications (LKSD.N) in an all-stock deal valued at about $1.4 billion, to expand its footprint in the industry.
LSC shareholders will receive 0.625 shares of Quad Class A common stock for each LSC share they own.
The deal represents a premium of 34 percent to LSC Communications shareholders, based on share prices of both companies as of Tuesday’s close.
Sussex, Wisconsin based Quad/Graphics produces catalogs, magazines, books, direct mail, and other commercial materials.
The deal is expected to add to the company’s earnings and save about $135 million in less than two years.
Quad Chief Executive Officer Joel Quadracci will head the combined company.
Shares of the Chicago, Illinois based LSC Communications rose 4.7 pct at $8.89 in premarket trade.
Quad is advised in this transaction by J.P. Morgan Securities LLC, BDT & Company and Foley & Lardner LLP, while LSC Communications is advised by BofA Merrill Lynch and Sullivan & Cromwell LLP.
Reporting by Vibhuti Sharma in Bengaluru; Editing by Sai Sachin Ravikumar and Shailesh Kuber