Bidders line up for InfoGroup

Officials at InfoGroup Inc., which employs about 1,500 people in the Omaha area, are taking bids to sell the company that Indian immigrant Vinod Gupta started 37 years ago as a provider of business sales leads and mailing labels.

The marketing and business research company, formerly called InfoUSA, has hired a prominent New York firm to advise it on a possible sale, according to sources with knowledge of the company's actions.

That firm, Evercore, facilitates major acquisitions and mergers and last June advised General Motors Corp. on the sale of some of its assets after it filed for bankruptcy.

At least 33 potential bidders have signed confidentiality agreements with Evercore that would allow them access to financial information about InfoGroup to help them prepare appropriate bids. Company officials are expected to meet next week to review preliminary bids, which are due Tuesday.

It's unknown how a sale could affect local employment numbers, but other large local companies have sold or merged and still retained a strong Omaha presence.

InfoGroup CEO Bill Fairfield did not immediately return phone calls Friday.

An analyst for a Little Rock, Ark., investment banking firm that does business with InfoGroup said there would be a long list of parties interested in acquiring the company.

InfoGroup's core data assets, “well-qualified management team” and reorganization since Gupta's removal as CEO and chairman make InfoGroup a “prime acquisition candidate,” said Carter Malloy of Stephens Inc., the Little Rock firm.

Gupta has not talked publicly about the company since 2007, about the time a special board committee was named to handle a shareholder lawsuit and a Securities and Exchange Commission investigation. “I've been muzzled,” he said then.

But about a year ago, Gupta publicly suggested that the company consider sale options.

The response by InfoGroup officials to Gupta's suggestion was unenthusiastic. The recession and the company's legal problems could negatively affect its market value, they said at the time.

However, with the recession easing and the company moving on from its rocky past and improving its balance sheet, its board of directors' mergers and acquisitions committee appears to be readying the company for a sale.

InfoGroup's sale of its Macro International research division and use of the proceeds to reduce debt by $93 million was a clear move to “clean up the balance sheet” and make InfoGroup more marketable, Malloy, the analyst, wrote in a research report earlier this year.

Gupta, who remains on InfoGroup's board of directors, cannot purchase the company. He has limited power after an agreement stemming from the shareholder lawsuit and after a “poison-pill” rule implemented by the board to prevent him from acquiring enough stock to take control of the company.

In fact, Gupta has been selling large blocks of stock almost weekly. He has sold about 3 million shares this year, although he still owns about 25 percent of the company — 14.6 million shares worth $96 million, according to his official filings. He previously had said he would be willing to sell his family's shares in connection with a sale of the company, an important factor in a possible sale.

The shareholder suit, brought by investment funds Cardinal Capital Management and Dolphin Funds, accused Gupta of diverting company funds to buy or lease homes, corporate aircraft, cars and a yacht for use by him, his family members and others, including Bill and Hillary Clinton.

Gupta maintained that the expenditures were for business purposes and resulted in additional revenue for the company.

Contact the writer:

444-1414, ross.boettcher@owh.com

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