10 February 2010
Transcontinental sells its high-volume U.S. direct mail operations

MONTREAL—Transcontinental Inc. announced this morning the sale of its high-volume direct-mail operations in the United States following a difficult year in the U.S. market.

Canada’s leading printing company signed an agreement to sell its U.S. high-volume direct mail operations to IWCO Direct, a U.S.-company headquartered in Minnesota. The sale includes substantially all of the assets of Transcontinental's U.S. direct mail group in Warminster and Hamburg in Pennsylvania, and in Fort Worth, Texas and Downey, California. The transaction is subject to regulatory approval and is expected to close by the end of Transcontinental's second quarter in April.

“Last year was a tougher year with the recession, especially in the U.S.” said Sylvain Morissette, vice president, corporate communications for Transcontinental, speaking to PrintCan.com from the company’s Montreal headquarters. The company had already closed some U.S. direct mail plants in 2009 and laid off approximately 1,000 workers in a restructuring.

Morissette would not reveal the sale price, nor has Transcontinental said how it will spend the proceeds. The units to be sold generated revenues of U.S. $153 million in 2009 and employ 1,200 people.

For fiscal 2009, ending last October, Transcontinental Inc.’s revenue dropped 6% to $2.29 billion from $2.43 billion and net loss totaled $81.8 million from net income of $6.6 million in 2008.  

In a press release announcing the sale, president and CEO François Olivier said “Transcontinental has decided to focus on its other market segments. The sale of our U.S. high-volume direct mail operations will benefit customers, employees and the industry.”

Morissette explained the company will focus on its traditional market segments, including commercial and newspaper printing, its media operations, and also its newer Internet solutions and digital printing platforms.

Transcontinental made a big move into the U.S. direct-mail market in 2003 with its purchase of CC3. At one time, the U.S. operations, under the Transcontinental Direct U.S.A. banner, had a network of eight plants in Philadelphia, Los Angeles, and Dallas. Transcontinental still has some smaller direct-marketing operations in the U.S.; in 2008 it purchased Rastar, Inc., which specializes in interactive database marketing and variable data digital printing,

For the full text of the press release, click here.

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