Valassis To Be Taken Private By Harland Clarke For About $1.84 Bln

(RTTNews) - Integrated payments solutions and marketing services provider Harland Clarke Holdings Corp. has agreed to acquire media and marketing services company Valassis Communications, Inc. (VCI) in a transaction valued at about $1.84 billion, the two companies said Wednesday. Shares of Valassis are gaining more than 21 percent in the regular trading session following the announcement.

Under the terms of the deal, Harland Clarke Holdings, a wholly-owned subsidiary of billionaire Ronald Perelman's diversified holding company MacAndrews & Forbes Holdings Inc., will acquire all of the outstanding shares of Valassis for $34.04 per share in cash. The acquisition price represents a 20 percent premium to Valassis' closing stock price of $28.30 per share on Tuesday.

Livonia, Michigan-based Valassis provides direct-marketing products, including coupon dispensers in grocery aisles, direct-mail inserts, online display advertising and "Have You Seen Me?" missing-children notices.

The transaction, which has been approved by the boards of directors of both companies, will be effected through a tender offer by a subsidiary of Harland Clarke for all the shares of Valassis. This will be followed by a merger of the acquisition subsidiary into Valassis.

Following the tender offer for the Valassis shares and the merger, Valassis will become a privately-held, wholly owned subsidiary of Harland Clarke and its common stock will cease trading on the New York stock exchange. Until the transaction is complete, both Valassis and Harland Clarke will continue to operate as separate companies.

The two companies noted that their combination will create a company in the transaction services, media delivery services, consumer and business direct, and education solutions industries, with combined revenues of about $3.3 billion.

Chuck Dawson, chief executive officer of Harland Clarke said, "The acquisition of Valassis is transformational for Harland Clarke Holdings, enabling us to further diversify our portfolio and expand our client base of more than 15,000 client accounts. We respect Valassis' proven ability to effectively and intelligently deliver media campaigns for our country's largest advertisers and marketers."

Dawson added that the acquisition of Valassis will be a strong complement to Harland Clarke Holdings' capabilities in managing customer relationships for the world's largest financial institutions, big-box retailers, as well as educational and governmental organizations worldwide.

Rob Mason, president and chief executive officer of Valassis, said, "Harland Clarke Holdings is the right owner for Valassis and has the expertise and resources to accelerate our continued evolution and innovation that will benefit our associates and Valassis' more than 15,000 clients."

San Antonio-based Harland Clarke said it will finance the acquisition with cash on hand and new borrowings. The company has received committed financing from Credit Suisse, BofA Merrill Lynch and Citigroup Global Markets Inc. to complete the transaction.

Harland Clarke added that prior to the closing of the transaction, it may elect to conduct a tender offer for Valassis' 6 5/8 percent senior notes due 2021 and may solicit consents from the holders of such notes.

However, the company noted that acquisition is not conditioned upon the completion of or any minimum acceptance in these transactions relating to the Valassis bonds.

Valassis' board of directors has recommended that its stockholders tender their shares in the transaction. The transaction is subject to the satisfaction of customary closing conditions and is expected to close in the first quarter of 2014 after Valassis pays its previously announced dividend on January 15, 2014.

Valassis said that in light of this transaction, it will not provide earnings guidance going forward. In addition, the company will not issue its previously announced 2014 guidance or host the conference call scheduled for today.

In Wednesday's regular session, VCI is trading at $34.30, up $6.00 or 21.20 percent on a volume of 5.50 million shares.