ValueVision International Completes Acquisition Of Montgomery Ward Direct Catalog Operations
Restructured Equity Agreement Simplifies Capital Structure And Reduces Future Stock Dilution
MINNEAPOLIS, Sept. 30 /PRNewswire/ -- ValueVision International, Inc. (Nasdaq: VVTV), the third largest television home shopping network in the United States, today announced completion of the purchase of 100% of the assets of Montgomery Ward Direct, Montgomery Ward & Co., Incorporated's four- year-old catalog business, and the restructuring of ValueVision's equity agreement with Montgomery Ward. Final closing of the earlier announced agreement had been subject to due diligence and government approvals under the Hart-Scott-Rodino Act.
The direct mail business is expected to add approximately $70 million in annualized sales to ValueVision's revenues.
"ValueVision's acquisition of Montgomery Ward Direct is well underway as we leverage our tele-marketing and fulfillment infrastructure to support the growth of our direct mail operations," said Robert L. Johander, Chairman and CEO of ValueVision International, Inc. "This acquisition has furnished ValueVision with a major presence in the direct mail industry in addition to providing the foundation for the company to continue its direct mail expansion as opportunities arise."
ValueVision has issued approximately 1,485,000 new vested warrants, exercisable at $0.01 per share to Montgomery Ward, as full consideration for the acquisition of Montgomery Ward Direct. ValueVision has received approximately $4.7 million in net assets of Montgomery Ward Direct, including cash and inventories, and the assumption of certain liabilities.
Ad Support Program Expanded / Equity Agreement Restructured
ValueVision and Montgomery Ward have entered into amended agreements to expand Montgomery Ward's advertising support and increase ValueVision's sales promotion rights. The agreements provide ValueVision's cable affiliates a guaranteed $20 million in a supplemental ad support program over five years from the Montgomery Ward TV ad budget. This program will assist ValueVision's affiliate relations department to build program distribution of its TV home shopping network through participating cable systems. As part of these amended agreements, ValueVision exchanged approximately 1,484,000 new vested warrants exercisable at $0.01 per share for 18.0 million unvested warrants from an earlier grant of 25.0 million ValueVision warrants exercisable at prices ranging from $7.00 - $17.00.
In addition, ValueVision has reduced its future stock dilution and simplified its capital structure in a restructured equity agreement with Montgomery Ward. Under the agreement, ValueVision will replace 7.0 million vested warrants received by Montgomery Ward from the earlier grant of 25.0 million warrants. ValueVision will issue 2.2 million new vested warrants, exercisable at $0.01 per share, to replace 4.0 million Series A warrants, exercisable at $6.50 per share, and 3.0 million Series B warrants, exercisable at $6.75 per share.
Following the new agreements, Montgomery Ward's potential ownership of ValueVision, on a fully diluted basis after the exercise of all warrants, would be approximately 6.5 million ValueVision common shares, representing approximately 17% of shares outstanding.
For additional information on ValueVision, International, Inc. by FAX, No cost, Dial 1-800-PRO-INFO, code #158.
SOURCE ValueVision International, Inc.
/CONTACT: Company - Stuart Romenesko, Chief Financial Officer, 612-947-5207; At Financial Relations Board - Daniel Saks, general information, or Steven Seiler, media contact, 310-442-0599, or Suzy Lynde, analyst contact, 312-266-7800/
CO: ValueVision International Inc. ST: Minnesota IN: ENT REA SU: TNM
AW-TT -- LAM014 -- 6410 09/30/96 07:00 EDT http://www.prnewswire.com
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|Date:||Sep 30, 1996|
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