Net marketing company Engage Technologies, majority owned by CMGI, today said it has agreed to buy CMGI's Adsmart and
Flycast Communications in a stock deal worth about $2.4 billion.
With the acquisition, Engage, which provides ad targeting technology to Web
sites, can combine its Internet ad-marketing products with Adsmart's Web ad
technology for online advertisers and Flycast's online direct response
technology, the companies said in a statement.
CMGI, headquartered in Andover, Mass., said Engage's acquisition is part of the Internet venture fund's larger strategy to create a single, integrated Internet marketing company.
The deal will provide Engage, also based in Andover, with a complete suite of
Internet ad and marketing products to sell to its customers and serve the
growing needs of online marketers, the company said.
CMGI has been busy adding to its collection of Web ad companies--it acquired Flycast, Adforce and Adsmart late last year
in its push to compete aggressively against top Web advertising company
DoubleClick. In December, CMGI also announced plans to acquire email
marketer YesMail.com.
Under the terms of the deal, Engage said it will buy San Francisco-based
Flycast and Andover-based Adsmart from CMGI for about 32 million
shares. Based on Engage's closing stock price yesterday of $76 a share, the
deal is valued at about $2.4 billion.
Engage said it will immediately oversee the operations of Adsmart and
Flycast, both of which will be fully integrated with Engage. The companies said Paul Schaut
will remain as president and chief executive of Engage, while Flycast CEO George
Garrick and Adsmart CEO John Federman will both join Schaut as presidents
to oversee strategic operations for the combined company. CMGI CEO David
Wetherell will continue to serve as chairman of the board for Engage.
The transaction is subject to certain regulatory conditions and the
approval of Engage shareholders. The companies said they expect to close
the deal in April or May of this year.
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