Valassis to Acquire ADVO

Formation of Leading Media Services Company

- Creation of diversified media services company with complementary

products, services and clients

- All cash price of $37 per share (approximately 32 million diluted shares)

- Transaction value is approximately 8.3x fiscal year ended Sept. 30, 2006

pro-forma EBITDA, including an estimated $40 million of cost synergies

- Expected to be accretive in 2007 on a cash earnings per share (EPS) basis

which excludes estimated amortization of intangibles arising from purchase

accounting

- Combined offering provides advertisers with both unmatched scale and

proven products; backed by a strong foundation of world-class targeting and

analytics



Jul 06, 2006, 01:00 ET from Valassis

    LIVONIA, Mich., and WINDSOR, Conn., July 6 /PRNewswire-FirstCall/ --
 Valassis (NYSE:   VCI), a leading company in marketing services, announced
 today that it has entered into a definitive merger agreement with ADVO
 (NYSE:   AD), the nation's leading direct mail media company, under which it
 will acquire all of the outstanding common shares of ADVO stock for $37 per
 share in cash in a merger. The fully financed transaction is valued at
 approximately $1.3 billion (on a diluted basis), including approximately
 $125 million in existing ADVO debt which Valassis expects to refinance.
     This acquisition will create the nation's largest integrated media
 services provider. The combination will feature the most comprehensive
 product and customer offering in the industry serving 20,000 advertisers
 worldwide, including 94 of the top 100 advertisers in the United States.
 The combined company will be positioned to capture growth across the
 expanded product and service portfolio, delivering customized, targeted
 solutions on a national, regional, zip code, sub-zip code and household
 basis. ADVO's shared mail distribution business penetrates up to 114
 million households, or 90% of U.S. homes, adding substantially to Valassis'
 weekly newspaper distribution of over 60 million households. The combined
 company will have 7,900 employees with operations in nine countries.
     "Together, Valassis and ADVO will be well positioned for growth as a
 more diversified company with complementary capabilities, product offerings
 and clients," said Alan F. Schultz, Valassis Chairman, President and CEO.
 "We will have an unsurpassed ability to deliver value and savings to
 consumers where, when and how they want -- and to do so with advanced
 analytics and targeting capabilities that maximize advertisers' return on
 investment. This combination is a first in the media services industry and
 uniquely positions us to capture growth by anticipating the needs of the
 marketplace and evolving to meet them."
     S. Scott Harding, ADVO Chief Executive Officer, added, "Advertisers'
 needs are becoming increasingly sophisticated and require solutions that
 are both scalable and customized. Our new company will deliver on these
 requirements with an unrivaled portfolio of products, leadership across
 multiple media platforms, proven targeting expertise and unmatched reach.
 In today's media world, that is an undeniably attractive combination."
     Mr. Schultz continued, "We are very pleased to welcome ADVO into the
 Valassis family. This is an exciting opportunity for employees, clients and
 shareholders."
     Transaction Overview
     Valassis expects the transaction to be accretive in 2007 on a cash EPS
 basis, excluding estimated amortization of intangibles arising from
 purchase accounting. Annual cost synergies of approximately $40 million are
 anticipated to be achieved beginning in 2007. The combined company expects
 revenue of approximately $2.65 billion in calendar year 2007. EBITDA in
 2007 for the combined company is anticipated to be between $305 million and
 $315 million.
     The combined company will be headquartered in Livonia, Mich., and
 maintain a substantial presence in Windsor, Conn. Mr. Schultz will remain
 Chairman, President and Chief Executive Officer and Mr. Robert L. Recchia
 will remain Chief Financial Officer. Mr. Harding will serve as a consultant
 to the combined company. The Valassis Board of Directors will remain
 intact.
     The merger agreement, which has been approved by the Boards of
 Directors of both companies, remains subject to the approval of ADVO
 shareholders, regulatory approvals and other customary conditions. The
 transaction is expected to close in three to four months.
     Valassis' financial advisors are Bear, Stearns & Co. Inc., who also
 provided committed financing for the transaction, with McDermott Will &
 Emery LLP as legal counsel. ADVO's financial advisors are Citigroup Global
 Markets, Inc. with Wachtell, Lipton, Rosen & Katz and Kirkpatrick &
 Lockhart Nicholson Graham LLP as legal counsel.
     Investor Conference Call Information
     An investor conference call will take place at 11 a.m. EDT today. The
 call-in number is (800) 240-6709. The call will be available via webcast
 through the Investor section of both company Web sites at
 http://www.valassis.com and at http://www.advo.com, and replay through July
 20, 2006 at (800) 405-2236 and the pass code number is 11065702. This press
 release and the webcast will be archived on the company Web sites under
 "Investor."
     About Valassis
     Valassis offers a wide range of marketing services to consumer packaged
 goods manufacturers, retailers, technology companies and other customers
 with operations in the United States, Europe, Mexico and Canada. Valassis'
 products and services portfolio includes: newspaper-delivered promotions
 and advertisements such as inserts, sampling, polybags and on-page
 advertisements; direct-to-door advertising and sampling; direct mail;
 Internet-delivered marketing; loyalty marketing software; coupon and
 promotion clearing; and promotion planning and analytic services. Valassis
 has been listed as one of FORTUNE magazine's "Best Companies to Work For"
 for nine consecutive years. Valassis' subsidiaries include Valassis Canada,
 Promotion Watch, Valassis Relationship Marketing Systems, LLC and NCH
 Marketing Services, Inc. For additional information, visit the company Web
 site at http://www.valassis.com.
     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 Valassis 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 Valassis' existing competitors; new
 competitors in any of Valassis' businesses; a shift in customer preference
 for different promotional materials, strategies or coupon delivery methods;
 an unforeseen increase in Valassis' paper costs; economic disruptions
 caused by terrorist activity, armed conflict or changes in general economic
 conditions; changes which affect the businesses of Valassis customers and
 lead to reduced sales promotion spending; the ability and timing for the
 closing conditions to be satisfied in connection with Valassis' merger
 agreement with ADVO; and the ability for Valassis to achieve synergies in
 connection with the merger and the integration of ADVO successfully into
 its business. Valassis disclaims any intention or obligation to update or
 revise any forward-looking statements, whether as a result of new
 information, future events or otherwise.
     About ADVO
     ADVO is the nation's leading direct mail media company, with annual
 revenues of nearly $1.4 billion. The company's industry-leading targeting
 technology, coupled with its unparalleled logistics capabilities, enable
 retailers seeking superior return on investment to target, version and
 deliver their print advertising directly to consumers most likely to
 respond. Serving 17,000 national, regional and local clients, ADVO reaches
 114 million households, more than 90% of the nation's homes, with its
 ShopWise(TM) shared mail advertising. The company can be visited online at
 http://www.ADVO.com.
     Safe Harbor and Forward Looking Statements
     This press release may contain certain statements regarding ADVO's
 business outlook, prospects, future economic performance, anticipated
 profitability, revenues, expenses or other financial items, future
 contracts, market opportunities and other statements that are not
 historical facts, such statements are "forward looking statements" within
 the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
 the Securities Exchange Act of 1934, each as amended. Such forward looking
 statements are based on current information and expectations and are
 subject to risks and uncertainties which could cause ADVO's actual results
 to differ materially from those in the forward looking statements. ADVO's
 business is promotional in nature, and ADVO serves its clients on a "just
 in time" basis. As a result, fluctuations in the amount, timing, pages,
 weight, and kinds of advertising pieces can vary significantly from period
 to period, depending on its customers' promotional needs, inventories, and
 other factors. In any particular period these transactional fluctuations
 are difficult to predict, and can materially affect ADVO's revenue and
 profit results. ADVO's business contains additional risks and uncertainties
 which include, but are not limited to: general changes in customer demand
 and pricing; the possibility of consolidation in the retail sector; the
 impact of economic or political conditions on advertising spending and
 ADVO's distribution system; postal and paper prices; possible governmental
 regulation or legislation affecting aspects of ADVO's business; the
 efficiencies achieved with technology upgrades; fluctuations in interest
 rates; the ability and timing for the closing conditions to be satisfied in
 connection with ADVO's merger agreement with Valassis and other general
 economic factors.
     Additional Information
     ADVO will file a preliminary and definitive proxy statement and other
 relevant documents concerning the proposed merger with the Securities and
 Exchange Commission. Its shareholders are urged to read the definitive
 proxy statement when it becomes available, because it will contain
 important information. Shareholders may obtain, free of charge, a copy of
 the definitive proxy statement (when it is available) and other documents
 filed by ADVO with the Securities and Exchange Commission at the Securities
 and Exchange Commission's website, www.sec.gov. In addition, documents
 filed with the Securities and Exchange Commission by ADVO will be available
 free of charge from ADVO. ADVO and its directors and executive officers and
 certain other of its employees may be soliciting proxies from shareholders
 of ADVO in favor of the proposed transaction.
     Information concerning the participants in the proxy solicitation will
 be set forth in the proxy statement when it is filed with the Securities
 and Exchange Commission.
 
 

SOURCE Valassis
    LIVONIA, Mich., and WINDSOR, Conn., July 6 /PRNewswire-FirstCall/ --
 Valassis (NYSE:   VCI), a leading company in marketing services, announced
 today that it has entered into a definitive merger agreement with ADVO
 (NYSE:   AD), the nation's leading direct mail media company, under which it
 will acquire all of the outstanding common shares of ADVO stock for $37 per
 share in cash in a merger. The fully financed transaction is valued at
 approximately $1.3 billion (on a diluted basis), including approximately
 $125 million in existing ADVO debt which Valassis expects to refinance.
     This acquisition will create the nation's largest integrated media
 services provider. The combination will feature the most comprehensive
 product and customer offering in the industry serving 20,000 advertisers
 worldwide, including 94 of the top 100 advertisers in the United States.
 The combined company will be positioned to capture growth across the
 expanded product and service portfolio, delivering customized, targeted
 solutions on a national, regional, zip code, sub-zip code and household
 basis. ADVO's shared mail distribution business penetrates up to 114
 million households, or 90% of U.S. homes, adding substantially to Valassis'
 weekly newspaper distribution of over 60 million households. The combined
 company will have 7,900 employees with operations in nine countries.
     "Together, Valassis and ADVO will be well positioned for growth as a
 more diversified company with complementary capabilities, product offerings
 and clients," said Alan F. Schultz, Valassis Chairman, President and CEO.
 "We will have an unsurpassed ability to deliver value and savings to
 consumers where, when and how they want -- and to do so with advanced
 analytics and targeting capabilities that maximize advertisers' return on
 investment. This combination is a first in the media services industry and
 uniquely positions us to capture growth by anticipating the needs of the
 marketplace and evolving to meet them."
     S. Scott Harding, ADVO Chief Executive Officer, added, "Advertisers'
 needs are becoming increasingly sophisticated and require solutions that
 are both scalable and customized. Our new company will deliver on these
 requirements with an unrivaled portfolio of products, leadership across
 multiple media platforms, proven targeting expertise and unmatched reach.
 In today's media world, that is an undeniably attractive combination."
     Mr. Schultz continued, "We are very pleased to welcome ADVO into the
 Valassis family. This is an exciting opportunity for employees, clients and
 shareholders."
     Transaction Overview
     Valassis expects the transaction to be accretive in 2007 on a cash EPS
 basis, excluding estimated amortization of intangibles arising from
 purchase accounting. Annual cost synergies of approximately $40 million are
 anticipated to be achieved beginning in 2007. The combined company expects
 revenue of approximately $2.65 billion in calendar year 2007. EBITDA in
 2007 for the combined company is anticipated to be between $305 million and
 $315 million.
     The combined company will be headquartered in Livonia, Mich., and
 maintain a substantial presence in Windsor, Conn. Mr. Schultz will remain
 Chairman, President and Chief Executive Officer and Mr. Robert L. Recchia
 will remain Chief Financial Officer. Mr. Harding will serve as a consultant
 to the combined company. The Valassis Board of Directors will remain
 intact.
     The merger agreement, which has been approved by the Boards of
 Directors of both companies, remains subject to the approval of ADVO
 shareholders, regulatory approvals and other customary conditions. The
 transaction is expected to close in three to four months.
     Valassis' financial advisors are Bear, Stearns & Co. Inc., who also
 provided committed financing for the transaction, with McDermott Will &
 Emery LLP as legal counsel. ADVO's financial advisors are Citigroup Global
 Markets, Inc. with Wachtell, Lipton, Rosen & Katz and Kirkpatrick &
 Lockhart Nicholson Graham LLP as legal counsel.
     Investor Conference Call Information
     An investor conference call will take place at 11 a.m. EDT today. The
 call-in number is (800) 240-6709. The call will be available via webcast
 through the Investor section of both company Web sites at
 http://www.valassis.com and at http://www.advo.com, and replay through July
 20, 2006 at (800) 405-2236 and the pass code number is 11065702. This press
 release and the webcast will be archived on the company Web sites under
 "Investor."
     About Valassis
     Valassis offers a wide range of marketing services to consumer packaged
 goods manufacturers, retailers, technology companies and other customers
 with operations in the United States, Europe, Mexico and Canada. Valassis'
 products and services portfolio includes: newspaper-delivered promotions
 and advertisements such as inserts, sampling, polybags and on-page
 advertisements; direct-to-door advertising and sampling; direct mail;
 Internet-delivered marketing; loyalty marketing software; coupon and
 promotion clearing; and promotion planning and analytic services. Valassis
 has been listed as one of FORTUNE magazine's "Best Companies to Work For"
 for nine consecutive years. Valassis' subsidiaries include Valassis Canada,
 Promotion Watch, Valassis Relationship Marketing Systems, LLC and NCH
 Marketing Services, Inc. For additional information, visit the company Web
 site at http://www.valassis.com.
     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 Valassis 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 Valassis' existing competitors; new
 competitors in any of Valassis' businesses; a shift in customer preference
 for different promotional materials, strategies or coupon delivery methods;
 an unforeseen increase in Valassis' paper costs; economic disruptions
 caused by terrorist activity, armed conflict or changes in general economic
 conditions; changes which affect the businesses of Valassis customers and
 lead to reduced sales promotion spending; the ability and timing for the
 closing conditions to be satisfied in connection with Valassis' merger
 agreement with ADVO; and the ability for Valassis to achieve synergies in
 connection with the merger and the integration of ADVO successfully into
 its business. Valassis disclaims any intention or obligation to update or
 revise any forward-looking statements, whether as a result of new
 information, future events or otherwise.
     About ADVO
     ADVO is the nation's leading direct mail media company, with annual
 revenues of nearly $1.4 billion. The company's industry-leading targeting
 technology, coupled with its unparalleled logistics capabilities, enable
 retailers seeking superior return on investment to target, version and
 deliver their print advertising directly to consumers most likely to
 respond. Serving 17,000 national, regional and local clients, ADVO reaches
 114 million households, more than 90% of the nation's homes, with its
 ShopWise(TM) shared mail advertising. The company can be visited online at
 http://www.ADVO.com.
     Safe Harbor and Forward Looking Statements
     This press release may contain certain statements regarding ADVO's
 business outlook, prospects, future economic performance, anticipated
 profitability, revenues, expenses or other financial items, future
 contracts, market opportunities and other statements that are not
 historical facts, such statements are "forward looking statements" within
 the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
 the Securities Exchange Act of 1934, each as amended. Such forward looking
 statements are based on current information and expectations and are
 subject to risks and uncertainties which could cause ADVO's actual results
 to differ materially from those in the forward looking statements. ADVO's
 business is promotional in nature, and ADVO serves its clients on a "just
 in time" basis. As a result, fluctuations in the amount, timing, pages,
 weight, and kinds of advertising pieces can vary significantly from period
 to period, depending on its customers' promotional needs, inventories, and
 other factors. In any particular period these transactional fluctuations
 are difficult to predict, and can materially affect ADVO's revenue and
 profit results. ADVO's business contains additional risks and uncertainties
 which include, but are not limited to: general changes in customer demand
 and pricing; the possibility of consolidation in the retail sector; the
 impact of economic or political conditions on advertising spending and
 ADVO's distribution system; postal and paper prices; possible governmental
 regulation or legislation affecting aspects of ADVO's business; the
 efficiencies achieved with technology upgrades; fluctuations in interest
 rates; the ability and timing for the closing conditions to be satisfied in
 connection with ADVO's merger agreement with Valassis and other general
 economic factors.
     Additional Information
     ADVO will file a preliminary and definitive proxy statement and other
 relevant documents concerning the proposed merger with the Securities and
 Exchange Commission. Its shareholders are urged to read the definitive
 proxy statement when it becomes available, because it will contain
 important information. Shareholders may obtain, free of charge, a copy of
 the definitive proxy statement (when it is available) and other documents
 filed by ADVO with the Securities and Exchange Commission at the Securities
 and Exchange Commission's website, www.sec.gov. In addition, documents
 filed with the Securities and Exchange Commission by ADVO will be available
 free of charge from ADVO. ADVO and its directors and executive officers and
 certain other of its employees may be soliciting proxies from shareholders
 of ADVO in favor of the proposed transaction.
     Information concerning the participants in the proxy solicitation will
 be set forth in the proxy statement when it is filed with the Securities
 and Exchange Commission.
 
 SOURCE Valassis