Netcentives Makes Move Offline with $24.8 Million Acquisition

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.

“Simply put, Netcentives can now — with the consumer’s permission —
recognize and reward an extraordinary range of consumer purchases.”

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.