DoubleClick E-Mail Solutions Goes to Epsilon

  |  February 15, 2006   |  Comments

Consolidation of e-mail service providers continues.

Alliance Data unit Epsilon has agreed to purchase DoubleClick's email unit for around $90 million in cash.

A spin-off or break-up of DoubleClick's various divisions has been widely expected since it was acquired by Hellman & Friedman and JMI Equity in April 2005.

Once the acquisition is completed, DoubleClick Email Solutions will become part of Epsilon Interactive, the former Bigfoot Interactive. The buy is another example of the considerable consolidation that the ESP space has seen in recent months.

There's no doubt that organizations are seeing email as part of a solution. I think the real clear distinction is we are providing our customers a fully integrated solution," said Al DiGuido, president of Epsilon Interactive.

The new company will have roughly 300 employees, 500 active accounts and a global presence with offices in over eight countries. DiGuido told ClickZ News the combined company expects to see annual "revenues north of $70 million."

The DoubleClick unit will add additional management, scale, clients, partnerships and a global sales presence to Epsilon Interactive's existing operations.

Though Epsilon said it would bring in an integration task force, DoubleClick Email Solution's 220 full-time employees are expected to retain their jobs. "We have a lot of respect for the people we are going to have as part of the solution," said DiGuido.

The management structure of the merged company has not yet been defined. "We're making sure we work together across the organization to…create a highly skilled team across the marketplace," said Eric Kirby, DoubleClick Email Solutions SVP and general manager.

Epsilon Interactive itself is the product of consolidation. This past fall Epsilon acquired Bigfoot Interactive in a deal that put Bigfoot's then CEO, Al DiGuido, in his current role as president of the interactive unit.

"The underlying theme behind DoubleClick's strategy over the past year and a half has been to focus aggressively on the core markets," said Kirby. "One of those businesses has been email, but we realized we could create a stronger email service by pairing up with a stronger player."

The deal is expected to close by the end of Q1.

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