It's official: Infogroup, the marketing and business research firm that employs about 1,500 people in the Omaha metropolitan area, has agreed to be acquired by CCMP Capital Advisors in a deal with a total value of about $635 million.
The acquisition, which also would result in the publicly traded company returning to private ownership, could conclude a yearslong drama that included investigations by the Securities and Exchange Commission, IRS and shareholder lawsuits alleging the misspending of millions by founder and former CEO Vinod Gupta, and the removal of Gupta as head of the company.
Infogroup's board of directors, which voted unanimously in support of the deal, announced the agreement with the New York-based private equity group Monday.
Worth around $460 million in cash in addition to assumption of the company's debt, the agreement also allows Infogroup to accept additional acquisition bids from outside parties for 21 days.
However, Infogroup would have to pay nearly $18 million to void the agreement, so any new bidder will have to beat the $8 per-share price offered by CCMP. The company's stock closed Monday at $7.92, down 2.94 percent.
To cover the termination fees, outside bids would have to start at around $8.30, said an analyst for Stephens Inc., a Little Rock investment banking firm that has long followed Infogroup.
“Infogroup ran a thorough process, but the potential for a competing bid, though not high, is always there,” said Carter Malloy, the Stephens analyst.
Infogroup hired New York investment bank Evercore Partners in 2008 to handle the sale.
A shareholder vote is pending, but Gupta and other Infogroup officers already have voted 36 percent of the company's shares in support of the deal, according to a filing with the SEC.
“After conducting a lengthy analysis, we are pleased with the thorough process and outcome,” Roger Siboni, Infogroup board chairman, said in a statement. “This transaction fulfills our commitment to maximize the value of Infogroup for all shareholders.”
Infogroup chief executive Bill Fairfield issued a statement saying that the agreement will give shareholders “an attractive, immediate and certain cash value for their shares.” The deal will add long-term stability, focus and flexibility for both clients and employees, he said.
Gupta, who immigrated to the United States from India, started the Omaha-based company 38 years ago in a garage with little more than an idea and a stack of phone books. It grew organically and through many acquisitions to employ more than 3,000 worldwide.
The company began courting buyers last fall and received preliminary bids from at least 33 companies, which reportedly included rivals such as Dun & Bradstreet in addition to other private equity firms.
CCMP has invested in more than 50 private and public firms worldwide, including Sidney, Neb., outdoor retailer Cabela's, Quizno's restaurants and other retail, industrial, energy, health care and media and telecommunications firms.
CCMP specializes in acquisitions and investments in companies ranging in size from $500 million to more than $3 billion, which puts the Infogroup deal closer to the low end of that scale.
“We are delighted to have reached an agreement to acquire Infogroup,” Richard F. Zannino, CCMP Capital managing director, who led negotiations, said in a statement. “Marketing clients today are craving innovative, impactful and cost-effective ways to reach their target customers.”
Direct marketing is an area where CCMP can help Infogroup broaden its market share and add value to its marketing services, CCMP officials said.
The transaction will likely close this summer, pending regulatory approvals and customary closing conditions.
Bank of America will provide debt financing for the transaction and Bank of America Merrill Lynch is acting as financial adviser to CCMP.
Contact the writer:
444-1414, ross.boettcher@owh.com
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