DoubleClick Explores Possible Sale
UPDATE: Disappointed with its share price, the company considers how to raise shareholder value in a hot mergers and acquisitions market.
Online marketing technology company DoubleClick has hired investment bank Lazard Freres & Company to explore “strategic options.”
The company, which lowered full-year 2004 forecasts when it reported earnings last week, says it’s trying to “achieve greater shareholder value.” The company said in a statement that it is considering selling off parts or all of its businesses, or spinning off parts. It would also consider recapitalization, buying back its shares or issuing an extraordinary dividend.
Amid the dot-com bust, DoubleClick elected to focus entirely on technology and divest itself of its media and research businesses. Now, the company may be missing out on some of the rebound brought about by the growth of Internet advertising.
“We think it’s a hot market but, in some ways, DoubleClick hasn’t been able to participate in that market, at least not to the extent that others have,” said Ken Marlin, managing partner at high-tech investment consulting firm Marlin & Associates. “That stems from a decision they made after the crash of 2000 to sell off their media business and focus on technology.”
However, Marlin adds that DoubleClick is in a good position to be acquired or sell off its businesses. “A lot of the logical buyers have got very strong currency, meaning strong stock price and cash, and there aren’t many companies like DoubleClick around,” he said.
The company’s stock has been trading in the mid-single digits, after achieving a 52-week-high of $12.81. Investors seemed to welcome the news of a possible shake-up, driving the stock price up nearly 12 percent to $7.11 at press time.
Last week, the company reported third-quarter earnings of $15,364, or $0.12 per share. At the time it said its data and email businesses were doing better, but marketing automation and ad management weren’t faring as well.
