Publisher rolls out millions for plant
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Looks for growth. 'Big-city newspapers will retain a big role,' Transcontinental says

By ROBERT GIBBENS
Freelance
(reprinted from The Gazette)
February 21, 2008

Master printer-publisher Transcontinental Inc. is plowing $60 million into its Transmag printing plant in Montreal and hopes to wrap up a contract to print a third U.S. metropolitan newspaper this year.

"Big-city newspapers will retain a big role in the fast-changing communications world if they adapt to the Internet, improve content and give advertisers all the services they need," said founder and executive chairman Rémi Marcoux, 67, before yesterday's annual meeting.

"The newspaper printing deals we've done in Canada and the U.S. are long-term partnerships with real winners, where we invest heavily in the latest technology," Marcoux said.

"The contracts run 15 years and are adjusted for inflation. The plants work 60 per cent for the newspapers and 40 per cent for ourselves."

Transcontinental uses its outsourcing deal with La Presse, for which it built the east-end Montreal printing plant, as its model for expansion in the United States. Marcoux said the scope is much greater in the U.S. than Canada, but he would not identify the newspaper he is negotiating with.

The new U.S. contract will not be as large as last year's $1-billion pact to print the San Francisco Chronicle for 15 years, but it still will be important for Transcontinental's long-term growth.

"I expect intensified consolidation in the North American printing industry, and we've got the financial depth to play a very active role," Marcoux said.

Transcontinental kept its bottom line growing last year after taking a hit from the Canadian dollar's upsurge and is confident it will keep on target in 2008 despite the U.S. financial services industry slowdown, said François Olivier, who stepped up to CEO from COO yesterday to replace Luc Desjardins.

Olivier, 42, a former Canada Packers executive who joined Transcontinental in 1993 and who is Marcoux's son-in-law, has led the build-up in newspaper outsourcing deals.

Desjardins plans to move to another large corporation.

"I was hired in 2000 to keep the company growing and assure the succession," Desjardins said. "The task was to take seven to 10 years ... so we were right on target."

Marcoux said Transcontinental will expand in the U.S. and Mexico, which now provide one-third of revenue. It is scouting South American growth markets, but won't touch Europe.

"We're always looking at acquisitions. The high Canadian dollar makes some very attractive ... and also for buying new technology."

Transcontinential has recently taken a $210-million, six-year contract to print all Rogers Communications Inc.'s 70 consumer, business and professional magazines from Quebecor World Inc. Marcoux said it was technology that prevailed, adding he might be interested in some Quebecor World assets if they became available in a restructuring.

CFO Benoît Huard said Transcontinental has low debt and strong cash flow, and could handle an acquisition worth $700 million to $800 million without affecting its investment-grade debt rating.

Its long-term target is an annual gain of 10 per cent in per-share earnings. But short-term earnings guidance will no longer be provided.

Transcontinental was formed by Marcoux in 1976 and went public in 1984.

Last year, it had revenue of $2.3 billion and net profit of $120.6 million. It has 15,000 employees and most of its plants are in Canada - they export to the U.S.

Transcontinental is Canada's second-biggest community newspaper publisher, with 172 titles, and the leading consumer magazine publisher.

It prints fliers, inserts and books, and offers a full range of digital services.

Last year's $103-million acquisition of PLM Group in Toronto made it a leader in digital printing and direct marketing.

© The Gazette (Montreal) 2008

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Transcontinental stays in family hands
Printing giant anoints François Olivier, founder's son-in-law, as company's new CEO

By BERTRAND MAROTTE
(reprinted from The Globe and Mail)
Feb. 21, 2008

MONTREAL -- Transcontinental Inc. founder and controlling shareholder Rémi Marcoux is making no apologies for keeping the business in family hands.

Mr. Marcoux, 67, presided yesterday over the handoff of the president and chief executive officer's title to his son-in-law François Olivier.

Mr. Olivier, 42, is married to Mr. Marcoux's daughter, Isabelle, who is vice-chairman and vice-president of corporate development at Transcontinental.

Mr. Olivier officially took over at the annual meeting yesterday from president and CEO Luc Desjardins.

Mr. Desjardins is a printing company veteran who joined Montreal-based Transcontinental eight years ago and became president and CEO in 2004 while a family succession plan was put in place.

Mr. Marcoux praised his son-in-law for working his way up through the corporate ranks since joining the company in 1993 and "exceeding expectations every step of the way." He said Mr. Olivier was chosen only after a "rigorous process" by the board's independent members and help from an outside firm.

"I am particularly pleased that they chose an internal candidate, and one who is also a member of my family," Mr. Marcoux said in his speech. "A common trait of companies that are successful over the long haul is that a majority of top managers are recruited internally."

Mr. Marcoux made it clear when Mr. Desjardins took over as CEO, that his goal at Montreal-based Transcontinental was for a second generation of his family to ultimately be at the helm. Also in executive positions at Transcontinental are Mr. Marcoux's son Pierre and a second son-in-law.

Mr. Olivier most recently headed up the printing division; he's credited with overseeing some of the company's largest press contracts, including the Canadian printing of The New York Times. He also spearheaded a business model for the outsourcing of the printing of major U.S. dailies.

Mr. Desjardins, 55, who is leaving the company, said he's looking for his next challenge but hasn't found it yet.

Mr. Marcoux, who retains the title of executive chairman, built Transcontinental, which went public in 1984, into Canada's largest commercial printer - sixth largest in North America - as well as a major publisher of magazines and community newspapers and a provider of marketing services.

Mr. Marcoux has resisted pressure to change the company's dual-class structure through which his family controls 62 per cent of the voting shares while owning only 15 per cent of the equity.

Mr. Olivier said before the meeting that Transcontinental hopes to ink a second long-term contract this year like one clinched last year for the printing of the San Francisco Chronicle. It's also aiming to win a big U.S. daily printing contract in 2009, he said.