Valassis Completes Acquisition of ADVO

Combined Entity Creates Nation's Leading Marketing Services Company

Mar 02, 2007, 00:00 ET from Valassis

    LIVONIA, Mich., March 2 /PRNewswire-FirstCall/ -- Valassis (NYSE:   VCI)
 announced today the completion of its acquisition of ADVO, Inc., the
 nation's leading direct mail media company, for an acquisition price of
 approximately $1.2 billion (on a fully diluted basis), including the
 refinancing of approximately $125 million in existing ADVO debt. The
 transaction was finalized on Friday, March 2, 2007. Shares of ADVO common
 stock were acquired by Valassis for $33.02 per share in cash, which
 includes interest accrued from Feb. 28, 2007 in accordance with the merger
 agreement. As a result of the acquisition, ADVO common stock will no longer
 be traded as of Monday, March 5, 2007.
     Valassis funded the ADVO acquisition, together with the refinancing of
 ADVO debt and the payment of fees and expenses, through an $870.0 million
 senior secured credit facility with a syndicate of lenders jointly arranged
 by Bear, Stearns & Co. Inc. and Banc of America Securities LLC, $540.0
 million in Valassis' 81/4% Senior Notes due 2015 and existing cash on hand.
     The combination of Valassis and ADVO provides the delivery of value-
 oriented consumer promotions by blending home newspaper delivery with
 shared direct mail. The combined company features the most comprehensive
 products and services offering in the industry serving over 15,000
 advertisers worldwide, including 96 of the top 100 advertisers in the
 United States. The combined company now has 7,500 employees with operations
 in 22 states and nine countries.
     "Today is a historic day as it marks the largest acquisition in
 Valassis history, further advancing a key growth strategy put into effect
 eight years ago," said Alan F. Schultz, Valassis Chairman, President and
 CEO. "By combining Valassis and ADVO, we are creating the nation's leading
 marketing services company. With complementary products, customers and
 distribution methods, we will now be able to offer superior customer
 solutions of unmatched reach, scale and value. This unique offering will
 allow us to gain a greater share of our customers' marketing budgets. We
 are working to make the integration process as seamless as possible for all
 of our stakeholders. In addition, over the next few years we will work
 diligently to maximize free cash flow and reduce debt."
     "We are excited to have finalized the Valassis-ADVO transaction and
 begin writing a new chapter in the company's history by combining ADVO's
 highly complementary shared mail with Valassis' newspaper-delivered
 offerings and existing 1 to 1 channels," said Robert A. Mason, ADVO
 President. "ADVO's extensive shared mail network will augment Valassis'
 newspaper distribution network by providing shared mail reach to over 90
 percent of U.S. homes. We now have the ability to grow our business by
 offering customers jointly- developed programs which optimize and integrate
 the usage of multiple distribution methods."
     Mr. Schultz will remain in his current role and lead the combined
 company, with Mr. Mason serving as President of ADVO. Valassis' executive
 management team will take an active role in the combined company's
 strategic direction. William F. Hogg, Valassis Executive Vice President of
 Manufacturing and Client Services, will continue to lead integration
 efforts while at the same time leading the manufacturing and client
 services areas of the combined company. Donald E. McCombs will retain his
 title of ADVO Executive Vice President and President of Operations. The
 combined company will be governed by the current Valassis Board of
 Directors and will continue to be headquartered in Livonia, Mich. ADVO will
 maintain a substantial presence in Windsor, Conn., where it has three
     About Valassis and ADVO
     The combination of Valassis and ADVO creates the nation's leading
 marketing services company, offering unique and diverse media plans with
 the most comprehensive product and services portfolio in the industry. The
 combined company offers products and services including newspaper-delivered
 promotions such as inserts, sampling, polybags and on-page advertisements;
 shared mail; direct mail; in-store marketing; direct-to-door advertising
 and sampling; Internet-delivered marketing; loyalty marketing software;
 coupon and promotion clearing; promotion planning; and analytic services.
 Together we reach over 60 million households through weekly newspaper
 distribution and 90% of U.S. homes though shared mail distribution. The
 company has relationships with more than 15,000 advertisers worldwide in
 various industries, representing 96 of the top 100 U.S. advertisers. With
 global headquarters in Livonia, Michigan, the company employs approximately
 7,500 associates in 22 states and nine countries and is widely recognized
 for its associate and corporate citizenship programs. Valassis companies
 include ADVO, Inc., Valassis Canada, Promotion Watch, Valassis Relationship
 Marketing Systems, LLC and NCH Marketing Services, Inc. For additional
 information, visit the company Web site at
     Safe Harbor and Forward-Looking Statements
     Certain statements found in this document constitute "forward-looking
 statements" within the meaning of the Private Securities Litigation Reform
 Act of 1995. Such forward-looking statements involve known and unknown
 risks and uncertainties and other factors which may cause the actual
 results, performance or achievements of the Company to be materially
 different from any future results, performance or achievements expressed or
 implied by such forward-looking statements. Such factors include, among
 others, the following: price competition from the Company's existing
 competitors; new competitors in any of the Company's businesses; a shift in
 customer preference for different promotional materials, strategies or
 coupon delivery methods; an unforeseen increase in the Company's paper or
 postal costs; economic disruptions caused by terrorist activity, armed
 conflict or changes in general economic conditions; changes which affect
 the businesses of the Company's customers and lead to reduced sales
 promotion spending; challenges and costs of achieving synergies in
 connection with the ADVO acquisition and integrating ADVO's operations; or
 the ability of the Company to generate a sufficient amount of cash flow to
 meet its debt obligations. The Company disclaims any intention or
 obligation to update or revise any forward-looking statements, whether as a
 result of new information, future events or otherwise.

SOURCE Valassis