Donnelley Financial Solutions Completes Spin-off

So it’s done. More than a year since it was first announced, RR Donnelley completed its split into three companies, according to an October 3, 2016 announcement on its website. We covered and wrote an update on the impending separation earlier this year; which, as we mentioned, resulted in three separate companies: RR Donnelley & Sons Company, LSC Communications, and Donnelley Financial Solutions.

On October 3, 2016, Donnelley Financial Solutions began trading as a separate entity on the New York Stock Exchange under the ticker DFIN. The stock has given ground since it opened at over USD 28 on October 3, 2016, but has now stabilized around the USD 21 mark as of October 10, 2016. At current levels, the company has a market capitalization of USD 680m.

According to reports filed in the runup to the listing, the businesses under Donnelley Financial Solutions generated revenues of USD 1.05bn. More up-to-date figures are not currently available.

The split matters to the language services industry because, during the split, Donnelley Financial for the first time broke out revenues for its Language Solutions arm. The unit posted sales of USD 81.5m in 2015, which makes it one of the industry’s larger language service providers.

The unit’s clients are mainly in legal, finance, life sciences, government, and in the communications departments of a diverse group of corporates. Donnelley Language Solutions also owns translation management system MultiTrans, which it licenses to corporate and LSP buyers.

Headed by CEO Dan Lieb, Language Solution’s newly formed parent company Donnelley Financial is described as potentially being “the real crown jewel among the three new entities” by a printing industry website.

RRD’s printing industry entity was spun off as LSC Communications (magazines, books, office products). It has a workforce of 22,000 generating USD 3.7bn in revenues and is headed by Tom Quinlan, former RRD CEO. The largest of the three, RR Donnelley, will retain 19.25% ownership in the other two entities. RR Donnelley employs 42,000 and has USD 7bn in revenues.

As we previously pointed out, Donnelley Financial could become a major force in the language services industry if Lieb and his management team consider the space a priority and leverage its considerable resources as a listed company to drive M&A and organic growth.