AKI tenders for 10½% notes

New York, Aug. 20 - AKI Inc. (B2/B+) said it has begun a cash tender offer for any and all of its $103.51 million of outstanding 10½% senior notes due 2008 and is also soliciting noteholder consents to proposed indenture amendments that would eliminate substantially all of the restrictive and reporting covenants, certain events of default and certain other provisions contained in the indenture.

The company set a consent deadline of 5 p.m. ET on Sept. 1 and said the tender offer would expire at 5 p.m. ET on Sept. 17, with both deadlines subject to possible extension.

AKI, a New York-based global marketer and manufacturer of multi-sensory marketing, interactive advertising and sampling systems in the fine fragrance, cosmetics and personal care industries, as well as other consumer products industries, is undertaking the consent solicitation in connection with the previously announced transactions with affiliates of Kohlberg Kravis Roberts & Co. and DLJ Merchant Banking Partners, including the merger of AHC I Acquisition Corp., AKI's parent, with AHC Merger Inc., a wholly owned subsidiary of Fusion Acquisition LLC, and the contribution of AHC I Acquisition to Jostens Holding Corp.

Noteholders who tender their notes by the consent deadline will receive a consent payment of $20 per $1,000 principal amount of notes tendered and accepted for purchase as part of the total consideration to be paid for the notes, which will be $1,028.75 per $1,000 principal amount. Holders who tender their notes after the consent deadline will not receive the consent payment as part of their consideration. All tendering holders will also be paid accrued and unpaid interest, if any, up to but not including the payment date.

AKI intends to fund the tender offer and consent payments with a portion of the proceeds from senior secured term loan and revolving credit facilities totaling up to $1.3 billion principal amount and a $500 million increasing-rate bridge loan to be secured by Jostens IH Corp., a wholly owned subsidiary of Jostens Holding Corp. (or, in lieu of the bridge loan, the incurrence of other debt by Jostens IH Corp.) in connection with the Kohlberg Kravis/DLJ transactions.

Completion of the tender offers and consent solicitations will be subject to several conditions, including the satisfaction or waiver of the conditions to the closing of the transactions, and the receipt by AKI of consents to the proposed amendments from the holders of at least a majority of the total principal amount of outstanding notes, and the execution of a supplemental indenture to the indenture governing the notes.

Credit Suisse First Boston LLC is the dealer manager and solicitation agent for the tender offers and the consent solicitations (call 212 538-0652 or 800 820-1653). MacKenzie Partners Inc. is the information agent (800 322-2885 or by email at proxy@mackenziepartners.com).

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