Cox Enterprises Inc. said Wednesday that it wants to sell its Valpak direct mail business, which includes a new $220-million printing facility in St. Petersburg.
Valpak, with $260-million in annual revenue, is part of Largo-based Cox Target Media, which employs about 1,200 people in Pinellas County. It is best known for its distinctive blue envelopes stuffed with coupon offers, which go out to about 46-million U.S. and Canadian households every month.
"We gathered all employees, and the CEO (Bill Disbrow) told everyone personally" Wednesday afternoon, said Deanna Willsey, director of communications.
To pare debt, Cox Enterprises, a privately held company based in Atlanta, is also selling the Austin American-Statesman and five other community papers in Texas, three papers in North Carolina and two in Colorado.
Valpak built the St. Petersburg facility, a landmark visible from Interstate 275, with the help of job-creation incentives from state and local government. It is the largest privately owned industrial building in the county.
"We believe the investments we have made in Valpak increased its appeal to potential buyers," said Cox Enterprises spokesman Bobby Amirshahi. "Nothing changes in the interim. We're at the very beginning of the sales process. We decided we didn't want to wait until we found a buyer to make announcement. We wanted to include employees at the very beginning."
In addition to its Pinellas headquarters and manufacturing plant, Cox Target Media has eight sales offices around the country and 200 independently owned franchises.
"Since becoming a Cox company in 1991, Valpak has become an industry leader and a brand that consumers around the country know and trust," said Jim Kennedy, Cox chairman and chief executive. "Its new state-of-the-art production facility will allow Valpak to offer advertisers even more effective and targeted tools to reach their customers."
The company did not disclose how much it expects to raise through the sales. It hired Goldman Sachs to assist with marketing Valpak, and Citigroup will work on sale of the newspapers.
Terry Loebel started Valpak in 1967 with a mailing to Clearwater households. He sold it in 1985 to a group of investors, who sold it to Cox in 1991.
In the corporate structure, Valpak is part of Cox Enterprises' newspaper division. Newspaper advertising revenues have fallen sharply, and some newspaper companies recently have written down the value of their assets. Just this week the Tribune Co. took a $3.8-billion charge to earnings, and E.W. Scripps Co. took an $874-million charge to write down the value of its newspaper brands.
Cox said there have been no job cuts at Valpak this year.
"This decision was made as part of an ongoing strategic review of our portfolio and enables us to maintain our strong and stable financial performance by further paying down debt," Cox CEO Kennedy said.
Cox, which launched with one Ohio newspaper, now earns only 20 percent of its revenues from its newspaper, television and radio properties; the rest comes from more profitable cable and auto auction operations.
After the sales, Cox still will operate the Palm Beach Post, the Atlanta Journal-Constitution and the Dayton Daily News in Ohio. Cox also owns the cable television company Cox Communications Inc. and Cox Auto Trader.
Information from Times wires was used in this report. Helen Huntley can be reached at [email protected] or (727) 893-8230.