Printing giant to stay a family affair
Transcontinental CEO curbs exit fears
By BERTRAND MAROTTE
MONTREAL -- Rémi Marcoux, who announced yesterday that he's stepping aside as chief executive officer of Transcontinental Inc. but will remain executive chairman, isn't about to let the printing and publishing giant -- one of Quebec Inc.'s much-touted jewels -- fall into non-family hands.
"I don't want my dream to stop here," he said at a news conference. "It's essential that members of my family hold important positions" in Transcontinental, he said, deploring the number of home-grown companies sold to "foreign interests" every year.
Mr. Marcoux, a native son of the entrepreneurial Beauce region, who built Transcontinental into one of North America's top 10 commercial printers, has handed over the CEO job to his trusted president and chief operating officer, Luc Desjardins, 51, a printing industry veteran who joined the company only four years ago.
But Mr. Marcoux, a chartered accountant who left rival Quebecor Inc. and joined up with two partners to buy a failed printing plant in a suburb of Montreal in 1975, made it clear that a second generation of the family will ultimately be in charge at Transcontinental. A daughter, Isabelle, and a son, Pierre, both in their early 30s, work as executives at Transcontinental, as well as two sons-in-law.
"They're passionate. They work hard," he said, adding that Placide Poulin -- the founding shareholder of bathtub and kitchen cabinet maker Maax Inc., who also hails from the Beauce region south of Quebec City -- recently sold out to majority U.S. interests after his two children in the company decided they didn't want to take over the family business.
Indeed, Mr. Marcoux -- who is about to turn 64 -- said he has no intention of changing the dual-class structure under which his family controls 62 per cent of the voting shares while owning only 15 per cent of Transcontinental's equity.
"It is my conviction that a family company creates more long-term value for shareholders. For Transcontinental in particular, the continuity and stability that structure has provided have enabled us to instill a unique corporate vision," he said in notes to his speech to shareholders at yesterday afternoon's annual meeting.
He said Transcontinental shareholders wouldn't benefit from the elimination of the dual-class share structure, a move some companies have spearheaded lately.
The moves are in response to calls from corporate governance activists. "That's not part of our program," he told reporters, adding that the decision to split the chairman and CEO titles and hand over the latter job to Mr. Desjardins is a big step in corporate governance terms.
Mr. Marcoux -- who bought out his two partners -- transformed Transcontinental into a leader in the printing and distribution of door-to-door flyers, especially with the creation of the "Ad-Bag" in Ontario and the "Publi-Sac" in Quebec, plastic bags filled with flyers and newspapers that can be hung on door handles. The company is also a leader in the printing of books, magazines, catalogues and directories.
Transcontinental is also Canada's fourth-largest print media group, with the Montreal business weekly Les Affaires, consumer magazines and a stable of small market dailies and community newspapers, including several dailies in the Atlantic provinces and Saskatchewan bought from CanWest Global Communications Corp. two years ago.
The company -- which employs 12,000 and posted revenue of $1.9-billion last year -- also prints big-city daily newspapers, including Montreal's La Presse and The Globe and Mail, one of its biggest customers.
"I anticipate [Mr. Desjardins] will hold a steady course that's been charted by Rémi over the years," said Andrew Ritchie, who is in charge of printing at The Globe as vice-president of operations.
"The transition will be very well managed. Ultimately, they've been planning for this for some time."
Mr. Marcoux said he plans to act as an adviser to Transcontinental's board on strategic direction such as future acquisitions.
Published by the Globe and Mail on Thursday, March 25, 2004