ModusLink’s $476 Million Acquisition of IWCO


Dechert LLP advised IWCO Direct, a leading provider of data-driven direct marketing solutions, in connection with its sale for US$476 million in cash to ModusLink Global Solutions, Inc., a global provider of digital and physical supply chain solutions. ModusLink’s advisors on the transactions included the law firms of Ice Miller LLP, Littman Krooks LLP, and Olshan Frome Wolosky LLP, while Stout Advisory served as financial advisor.

ModusLink has completed the acquisition of privately-held IWCO Direct, a leading provider of data-driven direct marketing solutions, for $476 million in cash.

With this transaction completed, IWCO Direct becomes a wholly-owned subsidiary of ModusLink Global Solutions. IWCO Direct will continue to be run by Jim Andersen, who has been CEO since 1999. ModusLink Corporation, the Company’s digital and physical supply chain business, will continue to be run by Jim Henderson.

For the last 12 months through October 2017, IWCO Direct had net revenue of $470.6 million, net income of $18.9 million and Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of $82.2 million. For the last 12 months through October 2017, ModusLink had net revenue of $417.8 million, a net loss of $22.5 million and negative EBITDA of $3.8 million, although net loss and EBITDA improved by $32.5 million and $28.0 million year-over-year, respectively, as a result of the corporate turnaround plan launched in May 2016. Select financial statements will be included on Form 8-K/A, which will be filed with the Securities and Exchange Commission within 75 days following closing.

IWCO Direct has consistently delivered highly-effective data-driven marketing solutions for its customers, which represent some of the largest and most respected brands in the world. Its full range of services includes strategy, creative and production for multichannel marketing campaigns, along with one of the industry’s most sophisticated postal logistics programs for direct mail. Through its Mail-Gard® product, IWCO Direct also offers business continuity and disaster recovery services to protect against unexpected business interruptions, along with providing print and mail outsourcing services. IWCO Direct is the largest direct mail production provider in North America, with the largest platform of continuous digital print technology and a growing direct marketing agency service. Their solutions enable customers to improve Customer Lifetime Value (CLV), which in turn, has led to increased revenue and longer customer relationships.

Olshan represented ModusLink Global Solutions, Inc. with a team including Steve Wolosky (Picture), Adam Finerman, Kenneth Schlesinger, Jason Saltsberg, Elizabeth Gonzalez-Sussman, Johnathan Duncan, Claudia Dubón, Mark Limardo and Jason Tomitz.

The Dechert team was led by corporate partner Craig Godshall and included corporate special counsel John Ix and associates Allies Misner, Jacob Greenberg, Erin O’Gurek, Heather Shimer and Ben Leese; tax partners Richard Wild, Ed Lemanowicz and associate Ken Wang; employee benefits partner Steve Skonieczny and associates Sarah Burke, Mike Binko and Andrew Braid; antitrust associate Beverly Ang; labor associate Jeff Rubin; IP special counsel Violetta Kokolus; and real estate special counsel Francois Quintard-Morenas.

Involved fees earner: Steve Wolosky – Olshan Frome Wolosky LLP; Adam Finerman – Olshan Frome Wolosky LLP; Kenneth Schlesinger – Olshan Frome Wolosky LLP; Jason Saltsberg – Olshan Frome Wolosky LLP; Elizabeth Gonzalez-Sussman – Olshan Frome Wolosky LLP; Johnathan Duncan – Olshan Frome Wolosky LLP; Claudia Dubón – Olshan Frome Wolosky LLP; Mark A. Limardo – Olshan Frome Wolosky LLP; Jason Tomitz – Olshan Frome Wolosky LLP; Craig Godshall – Dechert; John Ix – Dechert; Allies Misner – Dechert; Jacob Greenberg – Dechert; Erin O’Gurek – Dechert; Heather Shimer – Dechert; Ben Leese – Dechert; Richard Wild – Dechert; Edward Lemanowicz – Dechert; Kenneth Wang – Dechert; Stephen Skonieczny – Dechert; Sarah Burke – Dechert; Michael Binko – Dechert; Andrew Braid – Dechert; Jeffrey Rubin – Dechert; Beverly Ang – Dechert; Violetta Kokolus – Dechert; Francois Quintard-Morenas – Dechert;

Law Firms: Olshan Frome Wolosky LLP; Dechert;

Clients: ModusLink Corporation ; IWCO Direct;

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Author: Ambrogio Visconti