By Lisa Kerner
Charlotte, N.C., March 2 - Valassis Communications Inc. said it finalized its acquisition of ADVO, Inc. on Friday for $1.2 billion, including about $125 million in existing ADVO debt.
Shares of ADVO common stock were acquired for $33.02 each in cash with interest accrued from Feb. 28.
As a result, ADVO's common stock will cease trading as of Monday, according to a company news release.
Valassis funded the acquisition and refinancing of ADVO debt through an $870 million senior secured credit facility arranged by Bear, Stearns & Co. Inc. and Banc of America Securities LLC, as well as $540 million of Valassis' 8¼% senior notes due 2015 and existing cash.
"[This] 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," Valassis chairman, president and chief executive officer Alan F. Schultz said in the release.
"By combining Valassis and ADVO, we are creating the nation's leading marketing services company .... In addition, over the next few years we will work diligently to maximize free cash flow and reduce debt."
Schultz will remain in his current role and lead the combined company, and Valassis' executive management team will be involved in the combined company's strategic direction. Donald E. McCombs will remain ADVO executive vice president and president of operations.
ADVO is a direct mail media company located in Windsor, Conn.
Valassis is a marketing company based in Livonia, Mich.
| Acquirer: | Valassis Communications, Inc.
|
| Target: | ADVO, Inc.
|
| Transaction value: | $1.2 billion
|
| Payment per share: | $33.02
|
| Announcement date: | Dec. 19
|
| Closing: | March 2
|
| Stock price for target: | NYSE: AD; $33.00 on March 2
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