Heritage Partners to Acquire Package Services Division of R.R. Donnelley Logistics

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Acquisition will create full-service business-to-consumer delivery and supply chain solutions provider.

Heritage Partners, Inc., a leading private investment firm, today announced that it has reached an agreement to acquire the package logistics business of R.R. Donnelley Logistics, a unit of R.R. Donnelley & Sons Company (NYSE: RRD). Heritage intends to combine this business with American Package Express (APX Logistics, Inc., http://www.shipapx.com), a leading provider of business-to-home parcel delivery solutions. The agreement is subject to regulatory approval and is expected to close by the end of the third quarter, 2004. R.R. Donnelley will retain its print logistics, fulfillment and distribution businesses, and will continue to provide third-party logistics management services.

By joining the operational capabilities and market strengths of the two businesses, APX will create a fully integrated, nationwide delivery network that will service catalog businesses, e-retailers, direct marketing companies, publishers and a variety of parcel shippers. Combined services include delivery for business-to-consumer and retail parcels, books and flats weighing over 20 ounces, as well as reverse logistics (returns management).

“With this acquisition we will bring APX’s leadership as the largest parcel work-share partner with the United States Postal Service together with the customer volume and scale of R.R. Donnelley Logistics’ package business. This union will strengthen our ability to better serve our customers to meet and exceed their expectations,” said Brad Garberich, President and CEO of APX.

Mike Gilligan, Managing Partner of Heritage Partners, said, “The complementary nature of the two organizations will result in immediate benefits to our customers as the merger of these two organizations will provide full-service, end-to-end delivery and returns solutions to shippers in one seamless entity. We are also pleased that the new, larger enterprise will allow further enhancement of the relationship with a valued partner, the United States Postal Service.”

Shippers have been under growing pressure from increasingly savvy consumers to reduce shipping costs while ensuring reliable, quality delivery with transparent tracking capability and complete pipeline visibility. APX and RR Donnelley Logistics have been industry leaders in developing systems to provide expedited delivery at the lowest possible cost with full custodial control, as well as for advanced tracking and customer information management.

Heritage Partners, Inc., with $1.4 billion in capital under management, is the leading private investment firm specializing in the acquisition and equity-based re-capitalization of private, family owned businesses. Since 1987, the Partners have assembled a diversified portfolio of forty-eight investments with aggregate revenues approaching $3.5 billion.

The largest parcel work-share partner of the Unites States Postal Service (USPS), American Package Express collects, processes, sorts, tracks and expedites the delivery of business-to consumer and retail parcels, books and bound printed matter, flats and other classes of mail, and provides complete reverse logistics (returns management). Through its leading parcel work-share partnership, APX maximizes the unique strength of the US Postal Service in providing reliable, low-cost residential delivery six days a week, while allowing complete custodial control and a suite of tracking and data management systems. APX Logistics, Inc. is headquartered at 9939 Norwalk Boulevard, Santa Fe Springs, CA 90670. For more information please call (562) 906-6300 or go to http://www.shipapx.com

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