Harland Clarke Holdings Corp. Announces Cash Tender Offer and Consent Solicitation for 6 5/8% Senior Notes due 2021 of Valassis Communications, Inc.

SAN ANTONIO, Texas--()--Harland Clarke Holdings Corp. (the “Company”) today announced it has commenced a tender offer (the “Offer”) to purchase for cash any and all of the outstanding 6 5/8% Senior Notes due 2021 (the “Notes”) issued by Valassis Communications, Inc. (“Valassis”). In conjunction with the tender offer, the Company is soliciting consents (“Consents”) to the adoption of proposed amendments to the indenture governing the Notes (the “Proposed Amendments”). The Company currently expects that certain financing transactions relating to the Acquisition (defined below) will be launched following the Early Tender Date (defined below). The Offer is being made at this time in order to assist the Company in determining the principal amount of such financing transactions.

The pricing terms for the Offer are set forth below.

CUSIP  

Aggregate
Principal
Amount

 
Security
 

Early
Tender
Date

 

Tender Offer
Consideration*

 

Early
Tender
Premium*

 

Total
Consideration*

 
918866AU8 $258,900,000

6 5/8% Senior
Notes due 2021

5:00 p.m.,
New York
City time,
January
17, 2014

$987.50 $30.00 $1,017.50
 

*For each $1,000 principal amount of Notes tendered. Tendering holders will also receive accrued and unpaid interest to, but not including, the date of settlement, which is expected to coincide with the closing of the Acquisition (as defined below).

The Offer is being conducted in connection with the acquisition of Valassis by the Company (the “Acquisition”) in accordance with the Agreement and Plan of Merger (the “Merger Agreement”), dated as of December 17, 2013, by and among the Company, V Acquisition Sub, Inc., and Valassis. The consummation of the Offer and Consent Solicitation is expected to coincide with the closing of the Acquisition, which is currently expected to be completed in the first calendar quarter of 2014, subject to the satisfaction of closing conditions. However, the consummation of the Offer and Consent Solicitation is not a condition precedent to the Acquisition, and the Acquisition will be consummated even if the Offer and Consent Solicitation is terminated or otherwise not completed, assuming the other conditions to the Acquisition, as set forth in the Merger Agreement, are satisfied.

The Proposed Amendments will provide that the Acquisition does not constitute a “Change of Control” (as defined in the indenture governing the Notes) and, accordingly, does not trigger the requirement in the indenture to make a written offer to purchase all of the Notes. In order to be adopted, the Proposed Amendments require the consent of the holders of a majority in aggregate principal amount of the outstanding Notes (the “Requisite Consents”). Accordingly, if the Requisite Consents are received and the Offer is consummated, then Valassis will not be required to make a Change of Control offer to holders of the Notes, and the Company and Valassis will have no obligation to otherwise purchase or redeem the Notes, following the consummation of the Acquisition.

The Offer is currently scheduled to expire at 11:59 P.M., New York City time, on February 3, 2014 (such time and date, as it may be extended, the “Expiration Date”). Holders of Notes that are validly tendered (and not validly withdrawn) together with a valid Consent on or before 5:00 P.M., New York City time, on January 17, 2013 (such time and date, as it may be extended, the “Early Tender Date”) will be eligible to receive the Total Consideration (the “Total Consideration”) of $1,017.50 per $1,000 principal amount of Notes tendered, which includes an early tender premium of $30.00 per $1,000 principal amount of Notes (the “Early Tender Premium”). Holders of Notes that are validly tendered together with a valid Consent after the Early Tender Date but on or prior to the Expiration Date will be eligible to receive the Tender Offer Consideration (the “Tender Offer Consideration”) of $987.50 per $1,000 principal amount of Notes tendered and will not receive the Early Tender Premium. In addition to the Total Consideration or the Tender Offer Consideration, tendering holders will also receive accrued and unpaid interest to, but not including, the settlement date, which is expected to coincide with the closing of the Acquisition. Notes will not be accepted for purchase unless they are accompanied by a valid Consent that has not been validly revoked. The withdrawal and revocation deadline is 5:00 p.m., New York City time, on January 17, 2013 (such time and date, as it may be extended, the “Withdrawal Date”). The Company may extend the Early Tender Date and/or the Expiration Date without extending the Withdrawal Date.

Upon the terms and conditions described in the Offer to Purchase and Consent Solicitation Statement and the related Consent and Letter of Transmittal, the Company will accept for purchase any and all outstanding Notes validly tendered and not validly withdrawn pursuant to the Offer on or prior to the Expiration Date. Payment of the Total Consideration or the Tender Offer Consideration, as applicable, for the Notes so accepted for purchase will be made promptly following the Expiration Date. The Company may extend the Expiration Date to coincide with the closing of the Acquisition.

The consummation of the Offer is conditioned upon (a) the substantially concurrent completion of the Acquisition, (b) there being validly tendered and not validly withdrawn at least a majority of the aggregate principal amount of Notes outstanding, that are accompanied by valid Consents that have not been revoked, (c) the execution of a supplemental indenture implementing the Proposed Amendments and (d) satisfaction of certain other customary conditions. The Company reserves the right to waive any and all conditions of the Offer, in whole or in part, subject to applicable law.

This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation or sale would be unlawful. The Offer and related consent solicitation will only be made pursuant to the terms of the Offer to Purchase and Consent Solicitation Statement and the related Consent and Letter of Transmittal to be distributed to holders of Notes. Holders are urged to read these documents carefully before making any decision with respect to the Offer and the consent solicitation. Holders of Notes must make their own decisions as to whether to tender any or all of their Notes and provide the related Consent.

Holders may obtain copies of the Offer to Purchase and Consent Solicitation Statement and the related Consent and Letter of Transmittal from the Tender Agent and Information Agent for the Offer, D.F. King and Co., Inc., at (212) 269-5550 (collect, for banks and brokers only) and (800) 488-8035 (toll free).

Credit Suisse Securities (USA) LLC is the Lead Dealer Manager for the Offer and Lead Solicitation Agent for the related consent solicitation and BofA Merrill Lynch and Citigroup Global Markets Inc. are the Joint Dealer Managers for the Offer and Joint Solicitation Agents for the related consent solicitation. Questions regarding the Offer and consent solicitation may be directed to Credit Suisse Securities (USA) LLC at (800) 820-1653 (toll free) and (212) 538-2147 (collect).

None of the Company, the Dealer Managers and Solicitation Agents, the Tender Agent and Information Agent or any other person makes any recommendation as to whether holders of Notes should tender their Notes or provide the related Consents, and no one has been authorized to make such a recommendation.

About Harland Clarke Holdings Corp.

Harland Clarke Holdings Corp. delivers to multiple industries a robust portfolio of products and services designed to optimize customer relationships and generate revenue. Its business units have long been recognized as leading providers of best-in-class payment solutions, marketing services, data capture, and analytics delivered through multiple channels, including online, digital print technology, mobile, and phone. Harland Clarke Holdings' portfolio offers retail products, high-value transactional print and electronic documentation, security solutions, and business intelligence. Its skills in capturing, managing, analyzing, and delivering data measurement and assessment information, through both print and digital channels, support decision-making and improved outcomes for organizations worldwide. Harland Clarke Holdings serves the financial, insurance and investment services industries, as well as education, big-box retailing, accounting software, commercial, government, and franchising. Its clients, including more than 8,500 financial institutions, range in size from major corporate brands and trade associations, to state and local governments, small businesses and individual consumers. Harland Clarke Holdings Corp. is a wholly owned subsidiary of MacAndrews & Forbes Holdings Inc.

Forward-Looking Statements

Statements in this document that are not strictly historical, including statements regarding the proposed transactions described herein, the expected timetable for completing the transactions and any other statements regarding events or developments that we believe or anticipate will or may occur in the future, may be “forward-looking” statements within the meaning of the federal securities laws, and involve a number of risks and uncertainties. There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include risks and uncertainties related to, among other things: general economic conditions and conditions affecting the industries in which Harland Clarke Holdings Corp. and Valassis operate; the uncertainty of regulatory approvals; the parties’ ability to satisfy the tender offer and merger agreement conditions and consummate the transactions; the availability of financing on attractive terms or at all; Harland Clarke Holdings Corp.’s ability to successfully integrate Valassis’ operations and employees with Harland Clarke Holdings Corp.’s existing business; the ability to realize anticipated growth, synergies and cost savings; and Valassis’ performance and maintenance of important business relationships. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in Harland Clarke Holdings Corp.’s SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2012 and Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2013, June 30, 2013 and September 30, 2013 as well as Valassis’ SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2012 and Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2013, June 30, 2013 and September 30, 2013. The forward-looking statements made herein speak only as of the date of this release and neither we nor any of our affiliates assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise, except as required by law.

Contacts

Credit Suisse Securities (USA) LLC
Eleven Madison Avenue, 5th Floor
New York, NY 10010
Attn: Liability Management
Phone: 212-538-2147
Toll Free: 800-820-1653
or
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10015
Email: vci@dfking.com
Banks and Brokers Call: 212-269-5550
All Others Call Toll Free: 800-488-8035

Release Summary

Harland Clarke Holdings Corp. announced that it has commenced a tender offer to purchase for cash the outstanding 6 5/8% Senior Notes due 2021 issued by Valassis Communications, Inc.

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Contacts

Credit Suisse Securities (USA) LLC
Eleven Madison Avenue, 5th Floor
New York, NY 10010
Attn: Liability Management
Phone: 212-538-2147
Toll Free: 800-820-1653
or
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10015
Email: vci@dfking.com
Banks and Brokers Call: 212-269-5550
All Others Call Toll Free: 800-488-8035