Netcentives Makes Move Offline with $24.8 Million Acquisition
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Netcentives, which builds the infrastructure that powers online loyalty programs, took a step offline Wednesday, paying $24.8 million in cash and stock to acquire Universal Value Network, a company that makes technology that recognizes and rewards purchases made with credit cards.
The deal calls for Netcentives to pay $17.9 million in unregistered Netcentives stock, $2.8 million in cash, and to assume UVN's liabilities. Netcentives agreed to pay another 49,000 shares of common stock if UVN meets certain performance goals over the next 22 months.
The deal also gives Netcentives access to important data, because the acquisition includes a stake in Golden Retriever Systems. GRS has access to 90 percent of sources for US payment card transactions, including data from American Express, First Data Corp, Paymentech, Vital Processing Services, and other payment card processors.
"To be effective, we need to enable our customers to reward their consumers wherever they purchase -- online, by catalog or in a store," says West Shell III, chairman and chief executive officer of Netcentives.
Another online loyalty company, MyPoints.com, has recently also made moves into the offline rewards space. Both apparently feel that rewarding consumers for online behavior isn't enough. MyPoints.com in January acquired Alliance Development Group, which operates credit card rewards programs for the nation's largest supermarket chains, and forged a very tight alliance with Catalina Marketing, which markets to consumers in grocery stores.