X-ceed Acquires Zabit & Associates for $29.5 Million

  |  September 18, 1998   |  Comments

X-ceed Inc. , the acquisitiveinteractive company being directed by Scott Mednick, the founder and formerchairman and CEO of THINK New Ideas, acquired the Zabit & Associates Inc. agency (Z&A).

X-ceed Inc., the acquisitive interactive company being directed by Scott Mednick, the founder and former chairman and CEO of THINK New Ideas, acquired the Zabit & Associates Inc. agency (Z&A).

The acquisition of Z&A follows X-ceed's recent acquisitions of interactive companies Reset and Mercury Seven. The transaction was valued at about $29.5 million.

All three acquisitions are in keeping with X-ceed's strategy announced in July with its appointment of Mednick as chairman and chief strategic officer.

"X-ceed's acquisition of Z&A confirms that our focus will be directed to our core communication businesses, divesting our non-strategic assets and aggressively adding people and companies to deliver fully integrated, interactive communication solutions to global customers," said Werner Haase, X-ceed's CEO and co-chairman.

Founded in 1993 and headquartered in Sausalito, CA, the privately held integrated communications firm Z&A will now operate as a division of X-ceed. For the 12 months ended July 31, 1998, Z&A's revenues were approximately $10.1 million. "Many agencies talk about integrated communication. Z&A has actually been delivering it for over five years, and to some of the biggest companies in the world," said Haase.

Z&A's client list includes Aetna, Advanced Micro Devices, @Home, Charles Schwab, Cirrus Logic, Dell Computer, EDS, Fidelity, Fireman's Fund, Intel, Kaiser Permanente, McKesson, MGM Grand, NEC America, Oracle, Pitney Bowes, Sutter Health, TCW, Transamerica, Unisys, Wellpoint and Xerox New Enterprises.

The total transaction value of the Z&A acquisition is approximately $29.5 million--roughly 2.25 million shares of X-ceed stock and $11.9 million in cash and notes, X-ceed said.

William N. Zabit, CEO of Z&A, has been named president and chief operating officer of X-ceed, and will join its board of directors. Bradley K. Nelson has been named president and chief operations officer of Z&A and will join X- ceed's management board. Werner Haase will continue in his position as CEO of X-ceed, Inc.

"Z&A helps organizations solve problems and capitalize on opportunities through smart communication planning and creative communication solutions," Zabit said.

"We've been courted for acquisition by household names in advertising, public relations, consulting and interactive communication. We chose to join X-ceed because this organization offers by far the most exciting opportunity to help build a worldwide, integrated interactive communications firm. Others are talking about it. X-ceed now has the unique combination of talent to make it real," Zabit said.

X-ceed said its current revenues are more than $70 million..

"Zabit & Associates has redefined the way information can be communicated, presented and understood in both internal and external arenas," Mednick said. "Bill Zabit will help lead our company into a new era of understanding client communication needs and supplying the most creative and effective solutions to meet them."

"With Zabit & Associates on board, X-ceed will bring the complete spectrum of communication to interactivity," he Mednick. "This acquisition will allow us to significantly expand our operations and provide our clients with cutting edge interactive and traditional communication for internal and external solutions."

Z&A has approximately 70 employees. In addition to its headquarters, the company has four regional offices located in New York City, Chicago, Sausalito and Norwalk, CT. Z&A also owns and operates: Z Productions, a media division dedicated to producing film, video and multi-media presentations, documentaries, video news releases, commercials, public service announcements and media training courses; and Water Street Design Group, a full service creative and graphic design shop.

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