Improved Capital Structure Expected to Reduce Overall Debt by Approximately $220 Million and Eliminate More Than $30 Million in Non-Cash Interest Expense Annually
Vertis Holdings, Inc. ("Holdings") announced today that its principal operating subsidiary, Vertis, Inc. ("Vertis"), has commenced an offer to exchange (the "Exchange Offer") its outstanding 131/2 percent Senior Pay-in-Kind Notes due 2014 (the "Notes") for shares of Holdings' common stock (the "Common Stock"). Vertis is offering to exchange 838.37 shares of Common Stock for each $1,000 principal amount of Notes validly tendered, and not validly withdrawn. The Exchange Offer is open only to "qualified institutional buyers" and "accredited investors" as such terms are defined under the Securities Act of 1933 ("eligible holders").
Concurrently with the Exchange Offer, Vertis is soliciting consents (the "Consent Solicitation") from eligible holders to certain amendments (the "Proposed Amendments") to the indenture governing the Notes (the "Indenture") to remove substantially all of the restrictive covenants and certain events of default in the Indenture. Approval of the Proposed Amendments requires the consent of holders of at least a majority of the aggregate outstanding principal amount of Notes. Eligible holders that validly tender, and do not validly withdraw, their Notes at or prior to 5 p.m., New York City time, on Jan. 21, 2010 (the "Consent Time"), will be paid a consent fee of $5.00 per $1,000 principal amount of Notes. An eligible holder who validly tenders its Notes for exchange will be deemed to have delivered a consent with respect to such tendered Notes. Notes may not be withdrawn after the Consent Time.
The purpose of the Exchange Offer and Consent Solicitation is to improve Vertis' capital structure by reducing its overall debt approximately $220 million and annual non-cash interest expense by more than $30 million. Vertis believes consummation of the Exchange Offer and Consent Solicitation will better position Vertis to enter into value enhancing transactions, while simultaneously mitigating future refinancing risks. In addition, Vertis believes consummation of the Exchange Offer and Consent Solicitation will provide suppliers, customers and employees with more confidence in Vertis as a result of an improved capital structure.
The Exchange Offer and Consent Solicitation will expire at 5 p.m., New York City time, on Feb. 5, 2010, unless extended by Vertis (the "Expiration Time"). Eligible holders of the Notes may contact the Information and Exchange Agent, Bondholder Communications Group, LLC at (212) 809-2663 with any questions regarding the Exchange Offer and Consent Solicitation. The Exchange Offer and Consent Solicitation are subject to the terms and conditions set forth in the confidential offering memorandum and consent solicitation statement (the "Offering Memorandum") and the related letter of transmittal (the "Letter of Transmittal"), both dated Jan. 7, 2010. In order to qualify as an eligible holder and receive a copy of the Offering Memorandum and Letter of Transmittal, please visit the eligibility website, www.bondcom.com/vertis or contact the Information and Exchange Agent as soon as possible. Once investors qualify on the eligibility website, they will receive certain supplemental information and communications relating to the Exchange Offer and Consent Solicitation.
Prior to the date hereof, certain holders of the Notes, which collectively held, through one or more of their affiliates and consolidated funds, approximately 61 percent of the aggregate outstanding principal amount of Notes, each executed a support agreement whereby they agreed to validly tender all of their Notes in the Exchange Offer at or prior to the Consent Time.
Consummation of Exchange Offer and Consent Solicitation is conditioned upon the satisfaction or waiver of the conditions set forth in the Offering Memorandum and the Letter of Transmittal. Such conditions include, among other things, (i) eligible holders of at least 97 percent of the aggregate outstanding principal amount of Notes tendering their Notes at or prior to the Expiration Time, (ii) the issuance of Common Stock will not conflict with certain limitations in Holdings' certificate of incorporation or certain agreements to which Holdings is a party to and (iii) certain amendments, consents and waivers to Holdings' and Vertis' revolving credit facility and term loan agreement necessary to effectuate the Exchange Offer and Consent Solicitation have been entered into. Vertis may waive any of these or any other conditions to the consummation of the Exchange Offer and Consent Solicitation in its sole discretion.
This press release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any securities. The Exchange Offer and Consent Solicitation are being made only to "qualified institutional buyers" and "accredited investors" as defined under the Securities Act of 1933. The Common Stock has not been registered under the Securities Act of 1933 or under any state securities laws, and the Common Stock is subject to significant restrictions on transfer and resale as more fully described in the Offering Memorandum and the Letter of Transmittal. The Exchange Offer and Consent Solicitation are subject to the terms and conditions set forth in the Offering Memorandum and the Letter of Transmittal.
The Offering Memorandum and the Letter of Transmittal contain certain information about Holdings and Vertis that has not previously been publicly disclosed. Investors who would like to review this information should visit the following website http://OfferingMemo.VertisHoldings.com.
About Vertis
Vertis is a premier marketing communications company providing a vast array of print, direct marketing and technology-related services to many Fortune 1000 companies in the United States. Vertis provides its customers with print media solutions, including targeted advertising circulars, newspaper products and creative consulting services to meet their specific needs. Vertis also provides customers with a full array of products and services, such as direct mail programs to reach consumers on an individual basis, data analysis to help identify target audiences and program design services and direct mail production with varying levels of personalization. In addition, Vertis has a broad range of premedia and media services which support the design and development of its customers' advertising vision. Vertis' expertise in the design, production and distribution of effective advertising messages enables its clients to reach targeted customers with relevant messages.
Forward Looking Statements
This press release contains forward-looking statements. Words such as "believes," "anticipates," "expects," "estimates," "plans," "intends" and similar expressions are intended to identify forward-looking statements. All forward-looking statements reflect current views about future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from projected results. Factors that may cause these differences include, but are not limited to, management's current beliefs and assumptions with respect to Vertis' financial condition and liquidity and its leverage and debt service obligations, downgrades in its credit ratings, changes in the advertising, marketing and information services markets, the demand for its products and services, actions by its competitors, the level of capital resources required for its operations, general economic and business conditions, changes in interest rates, the financial condition of its customers, its ability to realize expected cost-savings from operational efficiency initiatives, its ability to execute business strategies, the effects of supplier price fluctuations on its operations, including fluctuations in the price of raw materials, changes in the legal and regulatory environment and other beliefs and assumptions relating to Vertis' business, liabilities and other factors.
Consequently, you should not rely on any forward-looking statements and should consider any such forward-looking statements only as Holdings' or Vertis' current plans, estimates and beliefs as of the date of this press release. Even if these plans, estimates or beliefs change because of future events or circumstances, Holdings and Vertis decline any obligation to publicly update or revise any such forward-looking statements.
Contacts:
Vertis Holdings, Inc.
Grace Platon
800.365.8957
