Valassis and ADVO to Amend Merger Agreement and Settle Litigation
Press release from the issuing company
LIVONIA, Mich., and WINDSOR, Conn., Dec. 19 -- Valassis and ADVO, Inc. today announced that the companies have amended the terms of their definitive merger agreement. Under the amended terms, Valassis will acquire all of the outstanding common shares of ADVO stock for $33 per share in cash, or an aggregate of approximately $1.2 billion (on a diluted basis), including approximately $125 million in existing ADVO long-term debt which Valassis expects to refinance. As part of the agreement, the companies have agreed to dismiss with prejudice their pending litigation in the Court of Chancery for New Castle County, Delaware.
Valassis' obligations under the amended merger agreement are not conditioned upon obtaining financing, and there are no conditions to close other than the approval of ADVO stockholders at a special shareholders meeting. The parties expect to close the transaction during the first quarter of 2007. In the event that the closing of the transaction is delayed after February 28, 2006, for reasons other than to obtain ADVO shareholder approval, Valassis will pay ADVO stockholders interest on the $33 per share purchase price at a rate of approximately 11 percent per annum, with the rate increasing every month thereafter.
Valassis further announced that, as a result of the extensive discovery proceedings in the litigation, including the continued review of over one million documents produced by ADVO and the depositions of over 30 ADVO witnesses, Valassis has determined that the evidence will not support the conclusion that ADVO or any of its directors, officers, agents or representatives engaged in any fraud or other misconduct in connection with the parties' entry into their original merger agreement.
"We are pleased to have reached this amended agreement with ADVO and put the litigation behind us," said Alan F. Schultz, Chairman, President and Chief Executive Officer of Valassis. "As we have maintained since the execution of the original agreement, we believe in the strategic value of an ADVO and Valassis combination and look forward to becoming a more diversified company with the benefits it will bring."
S. Scott Harding, Chief Executive Officer of ADVO, said, "We are glad to have reached an agreement with Valassis that allows us to move forward with a merger that has always made tremendous sense. We look forward to focusing our energy on creating value through combining and growing our businesses."
The transaction 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.
WhatTheyThink is the global printing industry's leading independent media organization with both print and digital offerings, including WhatTheyThink.com, PrintingNews.com and WhatTheyThink magazine versioned with a Printing News and Wide-Format & Signage edition. Our mission is to provide cogent news and analysis about trends, technologies, operations, and events in all the markets that comprise today’s printing and sign industries including commercial, in-plant, mailing, finishing, sign, display, textile, industrial, finishing, labels, packaging, marketing technology, software and workflow.