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ACCO Brands Corporation To Merge With MeadWestvaco Corporation’s Consumer & Office Products Business

ACCO Brands Corporation (NYSE: ABD), a world leader in branded office products, and MeadWestvaco Corporation (NYSE: MWV), a world leader in packaging, today announced the signing of a definitive agreement to merge MeadWestvaco Corporation’s Consumer & Office Products business into ACCO Brands in a transaction valued at approximately $860 million. Upon completion of the transaction, MeadWestvaco shareholders will own 50.5% of the combined company.

MeadWestvaco’s Consumer & Office Products business is a leading manufacturer and marketer of school supplies, office products, and planning and organizing tools including the Mead®, Five Star®, Trapper Keeper®, AT-A-GLANCE®, Cambridge®, Day Runner®, Hilroy, Tilibra and Grafons brands in the United States, Canada and Brazil. With the addition of this business, ACCO Brands increases its scale and strengthens its position as an industry leader in school and office products.

“This is a transforming event for ACCO Brands,” said Robert J. Keller, chairman and chief executive officer of ACCO Brands Corporation. “The merger supports our brand leadership strategy and will greatly expand our presence in important consumer channels and faster-growing geographies. We believe that the merger will provide investors with a compelling financial benefit and further enhance ACCO Brands’ ability to deliver shareholder value for years to come. We expect this combination to be immediately accretive and to significantly strengthen our balance sheet.

“ACCO Brands is positioned as a worldwide leader in the office products industry, and the addition of MWV’s profitable Consumer & Office Products business – and its outstanding employees – should enable significant growth for the new company around the world,” Keller concluded.

The combination, when completed, will increase ACCO Brands’ annual revenues by more than 50% and is expected to:
  • Immediately be accretive to ACCO Brands’ earnings per share; for the adjusted combined trailing twelve month period ended September 30, 2011, the combination is accretive by 70%, excluding synergies and transaction-related costs;
  • Yield $20 million of annualized cost synergies by 2014;
  • Enhance ACCO Brands’ gross profit and operating income margins; for the adjusted combined trailing twelve month period ended September 30, 2011 gross profit and operating income margins were higher by 110 basis points and 260 basis points, respectively;
  • Improve ACCO Brands’ leverage profile; net leverage for adjusted combined trailing twelve month period was 3.6x versus 3.9x for ACCO Brands standalone;
  • Enable ACCO Brands to re-capitalize its balance sheet and reduce its interest rate significantly;
  • Significantly enhance cash flow generation;
  • Increase scale in the mass merchandise channel providing greater consumer access and cost leverage;
  • Bring greater consumer insight and category management capabilities to the combined entity;
  • Provide a $200 million sales leadership position in Brazil, and double ACCO Brands’ size in Canada; and
  • Add important new brands and products in key categories to ACCO Brands’ existing portfolio of #1 and #2 brands.

ACCO Brands is one of the world’s largest office supply manufacturers. More than 80% of sales come from brands holding leading market positions in their categories. The company has strong and longstanding customer partnerships and an experienced management team with a demonstrated track record. Over the past three years, the company has made significant operational improvements and has reported consistent gains in earnings per share.

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