The combined company will have 7,900 employees with operations in nine countries.

Valassis, a marketing services company, has acquired ADVO, the rent to own industry's leading direct mail media company. The transaction is valued at approximately $1.3 billion including approximately $125 million in existing ADVO debt.

This acquisition will create the nation’s largest integrated media services provider. The combination will feature the most comprehensive product and customer offering in the industry serving 20,000 advertisers worldwide, including 94 of the top 100 advertisers in the United States. The combined company will have 7,900 employees with operations in nine countries. “Together, Valassis and ADVO will be well positioned for growth as a more diversified company with complementary capabilities, product offerings and clients,” said Alan F. Schultz, Valassis Chairman, President and CEO.

S. Scott Harding, ADVO Chief Executive Officer, added, “Advertisers’ needs are becoming increasingly sophisticated and require solutions that are both scalable and customized. Our new company will deliver on these requirements with an unrivaled portfolio of products, leadership across multiple media platforms, proven targeting expertise and unmatched reach. In today’s media world, that is an undeniably attractive combination.”

The combined company expects revenue of approximately $2.65 billion in calendar year 2007. Mr. Schultz will remain Chairman, President and Chief Executive Officer and Mr. Robert L. Recchia will remain Chief Financial Officer. Mr. Harding will serve as a consultant to the combined company. The Valassis Board of Directors will remain intact.

The merger agreement, which has been approved by the Boards of Directors of both companies, remains subject to the approval of ADVO shareholders, regulatory approvals and other customary conditions. The transaction is expected to close in three to four months.