Internet Marketing Firm to Be Acquired
DoubleClick Inc., an Internet marketing-services firm, said Monday that it had agreed to be acquired by Hellman & Friedman, a San Francisco-based buyout firm, for $1.1 billion.
DoubleClick shareholders will receive $8.50 a share in cash, the companies said in a statement, a 16% premium over the shares’ closing price Wednesday, before news of the impending deal pushed up the stock. The shares fell 45 cents, or 5.3%, Monday to $8.12 on Nasdaq.
U.S. companies spent $8.5 billion on Internet and other digital marketing in 2004, an increase of 21% from 2003, according to technology researcher Forrester Inc. in Cambridge, Mass. Spending will rise to $16 billion by 2008 as the Internet’s influence on consumers increases, Forrester says.
New York-based DoubleClick was an early player in the business but gave up selling Internet advertising after the technology investment bubble burst in 2000 to focus on software for sending e-mail ads and services such as tracking consumer purchases.
Sales fell to $301.6 million in 2004 from a peak of $505.6 million in 2000. The company hired investment bank Lazard in October to explore the sale of part or all of the company. Last week, DoubleClick reported a first-quarter loss of $917,000, or 1 cent a share, citing costs for searching for a buyer. It earned $7.69 million, or 5 cents, a year earlier.
DoubleClick “had a vision of building out this one-stop solution for marketers covering everything from marketing to data,” Eric Schmitt, a senior analyst at Forrester, said Monday. “They lost focus.”
DoubleClick Chief Executive Kevin P. Ryan will resign after completion of the acquisition, expected in the third quarter, according to the statement. A new board of directors and a chairman will be appointed.
“We look forward to partnering with the DoubleClick team to help realize the company’s significant opportunities for growth in both its online advertising and marketing and data business,” Hellman & Friedman managing director Philip Hammarskjold said in the statement.
