LSC Communications US, LLC entered into a stock purchase agreement to acquire Phoenix Color Corp. from ALJ Regional Holdings, Inc. (NasdaqGM:ALJJ) for approximately $140 million on February 3, 2022. Under the terms of agreement, If the closing date is after April 15, 2022 but on or before May 15, 2022, the purchase price will be decreased by $1.0 million, and if the closing date is after May 15, 2022, the purchase price will be decreased by an additional $1.0 million. The agreement provides for ALJ to pay a termination fees of $4 million to LSC under circumstances listed in the agreement. Phoenix Color Corp reported revenue of approximately $115.6 million and an adjusted EBITDA of $20.3 million for the period ending September 30, 2021. Dave McCree, Lakeside's Chief Executive Officer, will lead the combined business. Marc Reisch, former Executive Chairman of Phoenix, will support the business through the integration and remain with ALJ. Phoenix President John Carbone is retiring from the company as Phoenix begins this new era as a division of Lakeside. As of February 2, 2022, ALJ's board of directors unanimously approved the stock purchase agreement and recommends the stockholders vote “FOR” the Phoenix Color Sale Proposal. The transaction is subject to regulatory and stockholder approvals and compliance with Hart-Scott-Rodino Antitrust Improvements Act. The transaction was approved by ALJ's stockholders at a special meeting held on April 11, 2022. The transaction is expected to close during the second calendar quarter of 2022. ALJ expects that it may use the proceeds to pay transaction expenses, to pay down any remaining debt of the Company, to purchase additional assets or businesses, to buy back the stock and/or for any other purpose that our Board of Directors deems appropriate. Christopher M. Forrester and Cody Wright of Shearman & Sterling LLP acted as legal advisor for ALJ and Steven Seidman, Mark A. Cognetti, Anna Martini Pereira and Laura Acker of Willkie Farr & Gallagher LLP acted as legal advisor for LSC. Lincoln International LLC acted as financial advisor and fairness opinion provider to ALJ Regional Holdings, Inc. (NasdaqGM:ALJJ). American Stock Transfer & Trust Company, LLC acted as transfer agent to ALJ Regional Holdings, Inc.

LSC Communications US, LLC completed the acquisition Phoenix Color Corp. from ALJ Regional Holdings, Inc. (NasdaqGM:ALJJ) on April 13, 2022.