Italian Firm is Mystery Suitor in NetCreations Deal
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Italian firm SEAT Pagine Gialle will pay about $111 million in cash for New York-based NetCreations, according to terms announced Tuesday by the companies.
The news ends days of speculation over which company had stepped in to outbid online marketing and advertising giant DoubleClick for the smaller e-mail marketing firm.
Many industry insiders had pegged a media or offline direct marketer as the suitor. In reality, it's a media firm with an eye to becoming a marketer. Turin, Italy-based SPG is also a European leader in telephone and yellow pages directory publishing. It owns Italian ISP Tin.it and portal Virgilio.
SPG officials said the acquisition will help it in its efforts to parlay a portal and publishing business into marketing services.
"The NetCreations team and its business model fit perfectly with our desire to grow our information marketing capabilities," said SPG chief executive officer Lorenzo Pellicioli. "The agreement presents us with the opportunity to enter the U.S. market with a prime asset in the online consumer information marketing arena, and is consistent with our commitment to build a world-wide leading presence in this business segment."
As a result of the proposal, which NetCreations announced Thursday without naming the new player, NetCreations' board of directors approved a merger with SPG and dropped its agreement to merge with Alley-based DoubleClick. Under the terms of their earlier agreement, DoubleClick had the right to propose a counter-bid, but said it has no plans to do so.
SPG won out over DoubleClick in large part due to the pummeling that shares of DCLK have taken since it announced its intention to acquire NetCreations in early October. According to that deal, DoubleClick would have offered 0.41 of its shares in exchange for every outstanding share of NTCR, or about $12.15 per share, a 17 percent increase over NTCR's 10-day average price.
But by last week, that payoff to NetCreations had shrunk. At close of trading Thursday, the original agreement would have had DoubleClick offering $3.76 per share of NTCR, currently trading at $6.65.
The acquisition by SPG, which is expected to close in the first quarter of 2001, is subject to regulatory and shareholder approval. NetCreations must also pay DoubleClick a breakup fee of $8.6 million plus expenses, as stipulated by its original merger agreement with that company.
"This agreement represents a great opportunity to expand NetCreations' business," said NetCreations CEO Rosalind Resnick, who will be staying on to oversee the unit. "We will benefit from SEAT Pagine Gialle's strong presence and expertise in Europe. When combined with Consodata's offerings, we will have an opportunity to develop a global offering for our partners and clients."