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Cross Media Marketing Corp., an online and traditional direct-marketing firm, announced today it will buy LifeMinders, Inc., for $68.1 million in a cash-and-stock deal. LifeMinders which pioneered personalization in direct-email marketing, was put up for sale in May after Chairman/CEO Jonathon Bulklely forecast a pessimistic future.
The deal will give Cross Media access to LifeMinders' 20-million member database, its proprietary email platform and its balance sheet showing about $50 million in cash.
"This acquisition will support our publicly announced forecasted gross revenues of $100 million for this fiscal year, representing a 70-percent increase from last year, significant in this market and particularly significant for a company in only its second year in business," said Cross Media CEO Ronald Altbach in a joint announcement with Bulkely.
"In addition, we believe LifeMinders' extensive consumer database and personalization capability, married to Cross Media Marketing's effective direct marketing operations which contact and retain data on over 20 million consumers annually, create the ultimate marketing solutions provider on behalf of third-party brands in their quest to acquire customers in a cost effective manner," Altbach said.
The acquisition will support a previously announced forecasted gross revenue of $100 million for the fiscal year, representing a 70 percent increase over last year, he said. Cross Media's plan is to create a profitable $400 million to $500 million revenue company through organic growth and complementary acquisitions.
"Cross Media's significant growth and cash flow represents an exciting opportunity for our stockholders," Bulkeley said. "We believe that our strong core assets - a large membership database, a scalable technology infrastructure and our cash balance - can be leveraged by Cross Media to the advantage of our stockholders. The result will be an even stronger, profitable direct marketing company that can reach consumers through multiple platforms - online, direct mail and voice - with the right products at the right time."
Each company's board of directors has approved the deal. The $68.1 purchase price hinges on LifeMinders' maintaining its hefty net cash balance sheet by the expected closing date of Aug. 31.
For more on New York-based Cross Media (AMEX: XMM), click here.
The Web site for LifeMinders is here.