HARTFORD, Conn. — Marketing company Valassis Communications Inc. said Thursday it is buying Advo Inc., the nation's largest direct-mail marketer, for $1.2 billion. Advo shares soared 48 percent during trading to a 52-week high, while Valassis shares plummeted as much as 19 percent to a 52-week low during the session.
Valassis, based in the Detroit suburb of Livonia, Mich., said it will acquire outstanding shares of Advo, based in Windsor, for $37 each.
The combined company is expected to serve about 20,000 advertisers, including 94 of the top 100 in the United States, with direct-mail, newspaper inserts and coupon fliers, e-mail marketing and other programs.
The company will be headquartered in Livonia. Valassis said it would keep a "substantial presence" in Windsor.
The combined company will have about 7,900 employees with operations in nine countries, the statement said.
No information was immediately available Thursday about the number of jobs to be retained in Connecticut or whether some jobs would be eliminated or moved to Michigan as part of the transaction.
Advo was founded in Hartford in 1929. It sends about 27 billion pieces of mail annually and is the largest private customer of the U.S. Postal Service.
One of Advo's best-known products is its "Have You Seen Me?" cards that feature pictures and details about missing children. The company began in 1985 sending the mailers, which have been credited with helping authorities find more than 140 missing children.
The acquisition deal already has been approved by the boards of Valassis and Advo, but still requires approval from shareholders and regulatory agencies.
The transaction, which would close in three or four months, is valued at approximately $1.3 billion, including about $125 million in Advo debt that Valassis plans to refinance.
Company officials anticipate that the combined company will generate about $2.65 billion in revenue in 2007, Valassis chief financial officer Robert Recchia told an investors conference call.
Al Schultz, chief executive of Valassis, will serve as chairman, chief executive and president of the merged company. Recchia will be chief financial officer. Advo's chief executive officer, Scott Harding, will be a consultant to the company.
The companies began discussing a deal last year, and it gained steam earlier this year when Advo's stock price dipped to a nearly five-year low, Schultz said.
The new company will be able to distribute advertising and marketing products to more than 60 million newspaper readers and up to 114 million households, he said.
"It would be difficult, time-consuming and exceptionally expensive to duplicate Advo's national footprint," Schultz said. "We believe the Valassis and Advo cultures are similar in many ways . . . we hope to combine the best of both companies to provide a clear leader in media services."
Advo shares finished at $35.39, up $11.13, or 46 percent, on the New York Stock Exchange, while Valassis shares fell $3.65, or 16 percent, to close at $19.57, also on the NYSE .