U.S. Printing Firm R.R. Donnelley to Weigh Asia Exit

R. R. Donnelley & Sons Co. is considering a sale of its business in Asia Pacific as part of its efforts to raise cash and cut debt, according to people familiar with the matter. The stock rose as high as 20%.

RRD, as the Chicago-based company is known, is seeking about $800 million from the potential disposal, the people said. The majority of the assets are in China, the people said, which means a divestment would mark the U.S. printing and information services company’s exit from the world’s second-largest economy after almost three decades.

The company is working with a financial adviser on the sale of its Asian operation, which has drawn interest from buyers including other companies in the industry and private equity funds, said the people, asking not to be identified because the matter is private.

RRD said in a statement that “the company is not currently engaged in discussions to sell its printing and packaging business in Asia Pacific.” It added that, as part of its long-term strategy, it “continuously reviews its business portfolio and periodically explores opportunities to sell portions of its business to increase stockholder value.”

RRD, whose stock has plunged about 90% in the last four years, generated about $908 million of sales in Asia in 2019, according to its annual report. The region accounted for about 15% of the printing house’s total sales last year. It operates in locations including Beijing, Hong Kong, Shenzhen, Japan, Australia and Singapore and provides services ranging from printing and packaging to supply chain solutions, its website shows.

RRD rose 19% to close at $2.09 in New York trading, giving the company a market value of about $149 million.

The U.S. company was founded in the nineteenth century and has since expanded to 29 countries with 35,000 employees. It entered China in 1993. RRD is looking to complete a $250 million sale of its printing facility in Shenzhen by 2022, according to a company presentation in October.

The group has been selling assets to raise cash and reduce debt amid declining earnings. Last month, it sold its DLS Worldwide Inc. logistics business to TFI International Inc. for $225 million. Separately, it divested its International Mail & Parcel Logistics business to ePost Global LLC for an undisclosed amount.

A sale of the RRD’s China business would follow in the footsteps of other global companies that have exited the country recently. Those include French supermarket Carrefour SA, which last year sold an 80% stake in its China unit for $698 million in cash to local retailer Suning.com Co. German retailer Metro AG also divested its Chinese business to Wumei Technology Group Inc. for an enterprise value of about $2.1 billion.

Deliberations are ongoing and RRD could still decide to retain the business, the people said.

©2020 Bloomberg L.P.

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