Advo stockholders approve merger with Valassis
At a special meeting with its stockholders last week, direct mail firm Advo Inc. approved an amended merger agreement with Valassis Communications Inc.
The merger is expected to close during the first half of March. The parties had been expected to close the transaction during the first quarter of 2007.
Valassis, a newspaper insert distributor based in Livonia, MI, will pay $33 a share in cash for Windsor, CT-based Advo - below the $37 a share it agreed to pay when the two companies first struck a deal last year.
Including Advo's debt of $125 million, the deal is valued at about $1.2 billion.
Valassis had sued Advo to void the original deal in late August, accusing Advo management of misrepresenting the company's financial health.
Advo then filed a countersuit, saying Valassis had no right to back out of the agreement.
As part of the deal, the companies have agreed to dismiss their litigation in the Court of Chancery for New Castle County, DE.
Valassis initially pursued Advo in hopes a deal would curb its reliance on newspaper inserts and let it take advantage of growing demand for targeted advertising.
The transaction will create the nation's largest integrated media services provider, featuring comprehensive product and customer offerings in the industry serving 20,000 advertisers worldwide, including 94 of the top 100 advertisers in the U.S.
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 or 90 percent of U.S. households, 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.