
RR Donnelley (RRD) Stock Soars on Three Way Split Plan
NEW YORK (TheStreet) -- Shares of RR Donnelley & Sons (RRD) - Get Report are advancing by 2.68% to $17.98 on heavy volume in mid-day trading on Tuesday afternoon after the printing and related services company announced its intention to split into three different publicly traded companies.
One of the three companies will focus on financial communications, another on publishing and retail-centric print services, and the third will focus on customized multi-channel communications management.
"We see a significant opportunity to unlock value by allowing these three businesses to pursue their own strategies and invest according to the unique dynamics of their respective industries," CEO Thomas Quinlan III said in a statement.
"Each company will have the strategic focus, management resources and capital structure to enable it to strengthen its market position and pursue its growth opportunities, enhancing long-term value for stakeholders," Quinlan added.
RR Donnelley & Sons expects that the spinoff will be completed by the end of next year. Once the transaction is finished existing RR Donnelley shareholders will immediately own shares in the three new companies, FinancialCo, PRSCo., and CMCo.
Insight from TheStreet Research Team:
TheStreet's Jim Cramer, Portfolio manager of the Action Alerts PLUS Charitable Trust Portfolio commented on the RR Donnelley & Sons breakup in a recent post on RealMoney.com. Here is a snippet of what Cramer had to say:
Today we got terrific news from two companies that are determined to bring out value:Baxter (BAX) - Get Report and RR Donnelley. For ages, we have been pushing Baxter to split up -- it's even part of a chapter in Get Rich Carefully -- into a slower-growing methodical device company and a fast-ramping biosciences company.
RR Donnelley, the printing company we have so heartily embraced on Mad Money,knocked our socks off today with a decision to split into three companies, all of which make a ton of sense and didn't belong under one roof.
Tom Quinlan, a remarkable CEO, is giving you a financial communications services company, a customized multichannel communications management company and a printing services business.
The company before this new configuration seemed like a confusing mosaic. I like the financial communications business because Donnelley's got a hammerlock on financial communications of public companies. Its multichannel management business can cash in on the rage for brick-and-mortar retailers to go expand into e-commerce.
The most exciting division, though, will be its print services business, which I think can continue to consolidate an industry that prints catalogs and periodicals.
-Jim Cramer "Sometimes, Breaking Up Is Smart to Do" Originally Published on August 4, 2015 on RealMoney.com.
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