Valassis Acquires Majority Stake in PreVision

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Valassis Communications Inc. on Monday acquired 80 percent of PreVision Marketing, a customer relationship management firm, for an undisclosed amount of cash and stock.


PreVision, which Valassis said had sales of $14 million last year, provides consulting and technology services to assist its clients in creating targeted marketing promotions. It also markets data mining software and other products.


Alan F. Schultz, president/CEO of Valassis, Livonia, MI, said PreVision brings CRM experience and strong analytical and creative capabilities to the coupon giant, which derives the bulk of its revenues from distributing newspaper inserts for grocery chains. He said the agreement would allow it to offer a wider range of services to its current retail clients and give it a better chance to market its services to new types of clientele.


PreVision's strengths lie in its abilities to analyze the data that retailers have accumulated from their customers' purchasing behaviors, and then to use those data to create loyalty marketing promotions to acquire new customers and retain current patrons.


Clients of PreVision, Lincoln, MA, include Toys 'R' Us, U.S. West, The Gap, Bose, Qwest, Monster.com, Talbots and the U.S. Postal Service, in addition to grocery retailers Giant Eagle and Ahold's Stop & Shop.


The acquisition will give Valassis a foothold in retail segments other than grocery stores, Schultz said. He also said the agency-type services that PreVision offers to clients were appealing to Valassis.


"They do it from soup to nuts," he said. "Creative, strategy, research, execution of programs, designing and developing database technology, analytics, reporting. They are to our knowledge the only full-service customer relationship marketing agency that specializes in customer relationship marketing."


Although Valassis has a small CRM division, Schultz said PreVision would add creative capabilities and more sophisticated analytic and reporting abilities than Valassis has at its disposal.


Although Valassis' stock did not react favorably to the news of the acquisition, at least one analyst said he supported it.


"PreVision brings them management and a highly skilled staff," said Edward Atorino, analyst at Wasserstein Perrella Securities, New York. "Valassis has a position in this business, and this will help accelerate their size and scale."


The move follows several other investments, acquisitions and alliances made by Valassis in the past few years in database marketing and targeted coupon distribution, both online and offline.


Schultz said the company's strategy was to allow each of these businesses to grow independently, and then look for synergies between them.


PreVision was founded in 1993 and employs 150 people. It was owned by its three co-founders, Deborah Pine, Dierdre Girard and Cliff Blake.


Valassis said it expected the acquisition to negatively affect its earnings by about 4 cents to 8 cents per share for the next 18 months.
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