Transcontinental has agreed to sell its troubled U.S. high-volume direct mail operations to Minnesota-based IWCO Direct. The sale includes assets in Warminster and Hamburg in Pennsylvania, Fort Worth, Texas and Downey, California, a group that generated revenues of US$153 million in 2009 and employs some 1,200 people. The transaction is expected to close by the end of April.
“Transcontinental has decided to focus on its other market segments,” explained François Olivier (pictured above), Transcontinental president and CEO in a company release. “The sale of our U.S. high-volume direct mail operations will benefit customers, employees and the industry.”
Transcontinental launched its U.S. direct mail operation December 18th, 2003 with the acquisition of Philadelphia-based CC3, a $167 million direct marketing business with a network of eight facilities with locations in Pennsylvania, Texas and California. The largest financial acquisition in Transcontinental’s history at the time, the purchase immediately catapulted Transcontinental into one of the largest suppliers of direct mail in North America and pushed the Montreal-based printing and publishing company to over $2 billion in sales.
Last year was particularly hard on the U.S. direct mail operation. Revenues from the business was down 46 percent year-over-year, attributed primarily to the financial meltdown in the U.S. and a resulting decline in business from financial institutions. In reaction Transcontinental consolidated operations and about half of the company’s approximately 2,000 job cuts last year occured at its U.S. direct mail operations.
