Editions   North America | Europe | Magazine


Valassis Purchases NCH Marketing Services for $60 million

Press release from the issuing company

LIVONIA, Mich., Feb. 13 -- Valassis, the leading company in marketing solutions and connective media, announced today its acquisition of Deerfield, Illinois-based NCH Marketing Services, Inc. NCH is the premier coupon processing and promotion information management company in the United States and worldwide. Valassis acquired NCH for $60 million, paid for out of existing cash which totaled $97.2 million on December 31, 2002. Management believes this accretive transaction will have a positive impact on 2003 earnings per share (EPS) of approximately $.07 for the 10.5 months of consolidation, which will change the previous 2003 EPS guidance from down 8% to 18% versus 2002 to down 5% to 15%. "The acquisition of NCH complements Valassis' vision of being an innovative, integrated marketing solutions company," said Alan F. Schultz, Chairman, President and CEO of Valassis. "NCH and Valassis share similar cultures and values. We both strive to continually improve the promotional performance of our customers through consultative selling, data analysis and the increased use of technology." The acquisition also provides Valassis with a strong international infrastructure and 30 years of NCH international experience. "As a result of being on the Valassis Board of Directors since 1998, I am very familiar with Valassis' portfolio of products and services and feel they have substantial potential internationally," said Brian J. Husselbee, President and CEO of NCH. "The combination of our industry knowledge, resources and relationships with manufacturers and retailers will stimulate our growth worldwide." Husselbee and the NCH management team will remain in their current roles at NCH. Wan Ling Martello, Chief Operating Officer and CFO of NCH, and Husselbee will be present on the Valassis Fourth Quarter Earnings Call on February 20th. Under the terms of the transaction, Valassis purchased the privately held shares of NCH. A private equity firm held approximately 90% of the equity of NCH with the remaining shares held by management and other minority shareholders. NCH is expected to generate approximately $60 million in prorated revenue in 2003, changing the company's previous 2003 revenue guidance from being down mid-single digits to up slightly. "Based on our growth strategy and analysis, we believe this acquisition is a good use of cash," said Robert L. Recchia, Executive Vice President and CFO of Valassis. "It will have an immediate positive impact on EPS and operating cash flow, while positioning us for future expansion of our products and services worldwide."