Harland Clarke wraps tenders for 94.62% of notes issued by Valassis

By Susanna Moon

Chicago, Feb. 4 - Harland Clarke Holdings Corp. said holders tendered $244,979,000 principal amount, or 94.62%, of the $258.9 million outstanding principal amount of 6 5/8% senior notes due 2021 issued by Valassis Communications, Inc.

The tender offer ended at 11:59 p.m. ET on Feb. 3.

As previously announced, the offer was conducted in connection with Harland Clarke's acquisition of Valassis. The offer began Jan. 6.

Holders had tendered $241.6 million principal amount, or 93.4%, of the notes by 5 p.m. ET on Jan. 17, the early tender date.

As a result, the company entered into a supplemental indenture to amend the notes, which became effective when the early tendered notes were settled, according to a company news release.

Harland Clarke solicited consents to amend the notes indenture so that the acquisition does not count as a change of control and, accordingly, does not trigger the requirement to make an offer to purchase all of the notes.

Consents were needed from the holders of a majority of the outstanding notes.

Harland Clarke paid $1,017.50 per $1,000 principal amount of notes tendered by the early tender deadline, which included a $30.00 early tender premium.

Holders will also receive accrued interest up to but excluding the settlement date.

The completion of the tender offer was conditioned on completion of the acquisition, the receipt of tenders for at least a majority of the outstanding notes and the execution of a supplemental indenture implementing the proposed amendments.

The completion of the tender offer and consent solicitation was not a condition to the acquisition.

The company previously said it expected some financing transactions related to the acquisition to be launched following the early tender date. The tender offer was made in order to help the company determine the principal amount of those financing transactions, the company previously said.

Harland Clarke was looking to get a $150 million asset-based revolving credit facility due Feb. 20, 2018 in addition to its previously announced fungible $500 million first-lien covenant-light incremental term loan B-3 (B1/B+) due May 2018, as previously reported by Prospect News.

Also, the company plans to start a roadshow on Wednesday for an $865 million two-part offering of high yield notes, also as previously reported by Prospect News.

The lead dealer manager and lead solicitation agent was Credit Suisse Securities (USA) LLC (800 820-1653 or 212 538-2147). BofA Merrill Lynch and Citigroup Global Markets Inc. were the joint dealer managers. The tender agent and information agent is D.F. King and Co., Inc. (212 269-5550 collect, for banks and brokers only, or 800 488-8035).

Harland Clarke is a San Antonio-based provider of payment, marketing and security services. Valassis is a Livonia, Mich.-based provider of media solutions.

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