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Valassis to buy direct-mail giant Advo for $1.3B

By Furniture Today Staff -- Furniture Today, July 24, 2006

Livonia, Mich. — Marketing services provider Valassis has agreed to acquire direct-mail giant Advo in a $1.3 billion deal, creating what the companies say will be the largest U.S. integrated media services provider.

Valassis would acquire Advo's stock at $37 per share and would assume about $125 million in Advo debt, according to the agreement.

The combined company would have revenue of about $2.65 billion in 2007, with earnings before interest, taxes, depreciation and amortization of $305 million to $315 million. It would be based in Livonia, but would keep a "substantial presence" in Advo's home of Windsor, Conn., Valassis said.

Valassis provides services to manufacturers, retailers and others, including newspaper-delivered promotions and ads, door-to-door advertising and sampling, direct mail and Internet-delivered marketing.

Advo, which serves a number of furniture industry clients, is the largest U.S. direct-mail company, reaching 114 million households, or more than 90% of the nation's homes.

"By joining forces with Valassis, our new company will enable us to offer home furnishings and bedding retailers a wider portfolio of integrated media solutions that will appeal to a variety of customer segments," said Celie Campbell, Advo's vice president, category sales, home furnishings team.

Valassis leader Alan Schultz will be chairman, president and CEO of the combined company, and the Valassis board will remain intact. Advo CEO S. Scott Harding will be a consultant to the combined company.

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