July 3rd, 2001 - Just days ago, we reported that ad technology firm MediaPlex had made a deal to acquire the US arm of Internetad's online advertising business. Yesterday, this move was compounded through the announcement that ValueClick (Nasdaq:VCLK) had committed to acquiring MediaPlex in full. This aggressive consolidation is indicative of a market that has continued to struggle during a spending slowdown that has hit the interactive medium harder than any other.
It has been an environment in which investors have turned their backs on those companies whose cash reserves are irreversably drained, while capital-starved, though promising, properties have been acquired by stronger players at fire-sale rates.
This latest strategic move by ValueClick will assist the firm to gain market share by providing advertisers and publishers technologically robust digital advertising and marketing solutions, along with the media expertise that the core ValueClick team are so adept to provide. Previously, ValueClick's failure to provide a strong technological platform and series of tracking mechanisms kept them out of the leadership race presently dominated by DoubleClick, Engage, RealMedia, 24/7 Media and L90 - all of whom this year increased their focus on technology in an effort to alleviate the downturn in the media sector of their businesses.
Mediaplex's MOJO real-time ad serving and e-CRM technologies will combine with ValueClick's lesser-known Dynamo ad serving solution - which has until this time been predominently a publisher-side system - to leverage their technologies across a broader client base. In addition, at the close of the transaction, the combined company will have significant financial strength with expected cash balances of over $150 million, putting the company in a far more secure position than many of its competitors.
"The acquisition of Mediaplex continues to build our product suite so that we can provide our customers with comprehensive choices and services," stated Jim Zarley, Chairman and Chief Executive Officer of ValueClick. "Being able to extend our product offerings while achieving the significant cost reductions we have planned will ensure both the growth potential and financial stability that is needed in the market."
Tom Vadnais, who will continue in his roles as Mediaplex President and Chief Executive Officer following the transaction, also expressed a bullish view of the deal, stating that the strengths that each company can bring to the mix would help to "...establish a powerful combination of service offerings."
The combined company will have domestic offices in Westlake Village, CA, San Francisco, CA, New York, and Louisville, KT and international offices in the United Kingdom, Germany, France, Canada and Japan. Clients of both companies can now choose from an impressive array of media and technology choices around the world.
Under the terms of the agreement, Mediaplex's shareholders will receive .4113 shares of ValueClick common stock for each share of Mediaplex common stock. Upon closing, ValueClick will issue a total of approximately 14.9 million shares of its common stock for all the outstanding common stock of Mediaplex. As of last Friday's close price, this proposed transaction represents a 45 percent premium to Mediaplex shareholders. The merger is subject to approval by shareholders of both parties and standard conditions.