Donnelley/Bowne deal: what it means for Canada

8 March 2010

by Lorne Patterson

RR Donnelley is planning to acquire Bowne & Co., a provider of shareholder and marketing communications services for approximately US$481 million in cash, or $11.50 per share. The agreement has been approved by the boards of directors of both companies and the acquisition is expected to close in the second half of fiscal 2010.


Headquartered in New York, Bowne has operations in North America, Latin America, Europe and Asia. The company generated US$675 million in revenues during 2009 and offers digital one-to-one printing services for health care, transactional communications, financial services, marketing communications and other applications.

In Canada, Bowne has operations in four cities. The financial printing sales centres are in Montreal, Calgary, Vancouver, and Toronto. In addition to the financial printing office in Toronto, Bowne has a commercial printing plant located in Don Mills—a neighbourhood within the city. In the Toronto market Bowne is best known as a commercial print operation. The financial print segment is very specialized and probably wasn’t well understood by the marketplace or even the Bowne plant itself, for that matter. There’s also an operation in St Laurent, Quebec that provides customer communications, welcome kits, and 1-to-1 marketing communications.

So what will the merger mean to the Bowne operations in Canada? This is hard to say but as my editor says, when you don’t have any data you can still have an opinion. So, in my opinion, the Don Mills plant was always an anomaly in the Bowne empire, so I can’t see it being an integral part of the merger. Donnelley bought the Grafikom MIL operation in December 2008 so it’s unlikely they’ll need another Toronto operation. My guess is that it will be packaged up and sold.

The St. Laurent plant in Quebec is specialized enough that it could survive the merger. Customer communications, welcome kits, and 1-to-1 marketing communications should satisfy the strategic imperatives that Donnelley considers in acquisitions.

As for the financial printing sites, Donnelley opened a new financial services office in Calgary in March 2009. That location was designed to allow the company to address the financial print and related communications needs of businesses and law firms in Western Canada so that would make the Bowne site there redundant.

Donnelley has the Benwell Atkins plant in Vancouver, but not a large financial print presence in the B.C. market, so I’d look for some kind of consolidation in Vancouver.

I expect that the Toronto and Montreal financial centres will undergo some consolidation and rationalization as well.

I think that industry consultant Clint Bolte, in a comment on the Print CEO blog, put the deal in good perspective. On the world stage RRD has really put a major competitor out of business. Let’s not forget that the Canadian operations were by no means the main focus of this deal. Donnelly bought extremely valuable relationships with the financial services and legal community so it makes sense that some customer service and sales personnel will be retained. However, production and most other overhead probably won’t be needed in Canada as work will be consolidated into Donnelley’s existing plants.

But, consolidating Canada’s financial printing in Donnelley may also open the doors to some smaller boutique financial print operations that could service local needs. After all, not everyone likes to be serviced out of the States— be it Donnelley in Chicago or Bowne in New York.

Lorne Patterson was managing director of Bowne's financial printing operations across Canada. Since 2006, he has been a consultant to the printing industry