Back in July, Valassis Communications, a marketing services firm that's one of the biggest coupon distributors in North America, announced "exciting" news: It was planning to buy direct-mail firm ADVO.
The proposed $1.3 billion cash deal, announced July 6, was to have created "the nation's largest integrated media services provider," serving 20,000 advertisers around the world with 7,900 employees in nine countries, according to Valassis' press release. ADVO, based in Windsor, Conn., is best known for the postcard-size ad mailings it sends to 114 million households, which represent more than 90 percent of U.S. homes.
Valassis, headquartered in Livonia, Mich., distributes coupon booklets to 60 million homes through 550 Sunday newspapers.
"We are very pleased to welcome ADVO into the Valassis family," Alan F. Schultz, Valassis' president and chief executive officer, said in a statement announcing the news. "This is an exciting opportunity for employees, clients and shareholders."
But the excitement didn't last long. Just 55 days, in fact: On Aug. 30, Valassis filed a lawsuit to nix the deal. ADVO, according to the Valassis complaint, intentionally supplied false sales forecasts and withheld information about "significant internal control deficiencies associated with ADVO's enterprisewide order-to-cash system."