ValueAct to buy out Catalina for US$1.7 billion

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By: Wise Marketer Staff |

Posted on March 15, 2007

ValueAct to buy out Catalina for US$1.7 billion

Catalina Marketing has entered into an agreement to be acquired by an affiliate of ValueAct Capital in an all-cash transaction valued at US$1.7 billion, including the assumption of approximately US$135 million of current debt.

ValueAct Capital will acquire, by merger, all of the outstanding equity interests of the company that it does not already own, for US$32.10 per share.

Under the terms of the agreement, Catalina stockholders will receive US$32.10 in cash for each outstanding share of stock (approximately 32% above the closing share price on 7th December 2006 - the last trading day before disclosure of the initial unsolicited expression of interest).

Also under the terms of the merger agreement Catalina may solicit or entertain alternative proposals from third parties during the next 45 days. Catalina does not intend to disclose developments with respect to this solicitation process unless its board of directors makes a firm decision to enter into an alternative transaction.

Deliberations The company previously disclosed that it had engaged Goldman, Sachs & Co. as its financial advisor. The special committee has also retained Lazard to assist it in connection with its deliberations. Based on consultations with these firms, and following discussions with various other potentially interested parties and other activities, the special committee and the board of directors have approved the agreement, and the board of directors has recommended that the company's stockholders vote in favour of the agreement.

The transaction is expected to close in the next few months and is subject to approval by the company's stockholders (other than ValueAct Capital) as well as regulatory approvals and other customary closing conditions. In the meantime, ValueAct has received the necessary debt financing commitments from third parties.

Background Catalina Marketing was founded over 20 years ago based on the idea that targeting communications based on actual purchase behaviour would generate a better consumer response. Catalina now combines insight into consumer behaviour with dynamic consumer access to provide marketers with the ability to execute behaviour-based marketing programmes. The company provides a range of promotional messaging, loyalty programmes, and direct-to-patient information services.

According to ValueAct's Jeffrey Ubben, who has been a director of Catalina since May 2006, "ValueAct Capital has been an investor in Catalina Marketing since 2003, and is proud to be the company's largest shareholder. Catalina has an impressive portfolio of businesses, unique products, strong cash flows and a highly skilled employee base."

Dick Buell, CEO, added: "We are excited to secure a transaction with owners that support our vision and are committed to its execution."

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