eSynergies Snaps Up Xceed Assets
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E-business consultancy eSynergies will snatch up the remains of bankrupt interactive shop Worldwide Xceed Group, ending months of speculation over the firm's eventual fate.
Through the purchase, which was approved by the U.S. Bankruptcy Court of the Northern District of Illinois, Chicago-based Xceed's Web strategy, application development and interactive sales and marketing practices will be rolled into a subsidiary of Newport Beach, Calif.-based eSynergies.
Accordingly, Xceed's remaining offices in Los Angeles, New York, Dallas, Chicago and Atlanta will be integrated with eSynergies' online marketing division Salesmation, and its e-commerce software division CommerceSwitch. (Financial terms of the deal were not disclosed.)
As a result, eSynergies -- which to date has operated largely as an ASP -- will gain capabilities in new areas.
"Our new Xceed division enables eSynergies to fulfill multi-million dollar contracts and compete in the interactive agency, e-consulting and e-services industries," said eSynergies chief executive Ted Marr. "The substantial equity capital that was invested in Xceed during its growth phase built a valuable brand that we intend to support and grow."
At its height, Xceed commanded a $1 billion market cap, ran 11 offices and employed a workforce of 600. But like most of the Web design-turned-online marketing and e-commerce strategy players, the company felt the sting of a hostile market following last year's correction. In April, Xceed filed for Chapter 11 bankruptcy protection.
But while the firm is out of cash, it still retains about $4 million in receivables, 118 employees, and customer contracts with Hilton Hotels, CBS Entertainment, Universal Studios, and other large companies -- all of which eSynergies will take over.
However, eSynergies will also have to take on a term loan of about $3 million and unspecified leases and executory contracts. Nevertheless, executives said they see the acquisition as a sign of healthy industry reorganization.
"As the industry consolidates, fewer companies will be competing for potentially larger contracts," Marr said.