Avenue A Buys i-FRONTIER

Online ad firm Avenue A added creative capabilities to its technology and media offerings, announcing on Tuesday the acquisition of i-FRONTIER, a Philadelphia-based Web shop focused on the pharmaceutical industry.

The deal brings to Seattle-based Avenue A a full-service interactive agency, which offers services like Web site and online ad development, search-engine optimization, and media planning. Drug companies, including AstraZeneca, Novartis and Aventis, dominate the six-year-old Web shop’s client roster.

Avenue A dipped into its $115 million of cash and cash equivalents to make the deal. The company did not disclose the amount paid.

“It makes a statement to our commitment to this space,” said Brian McAndrews, Avenue A’s president and chief executive. “We feel we can be the leading company in this space and we’re clearly tasking steps in that direction.”

i-FRONTIER will keep its brand and operate as an Avenue A subsidiary, joining the company’s other operating units: interactive agencies Avenue A and Avenue A/NYC, and ad technology provider Atlas DMT.

“Our strength has always been in technology and analytics,” McAndrews said. “This will be a powerful addition.”

i-FRONTIER’s 58 employees will remain at the company, Avenue A said, with its president, Brad Aronson, remaining in charge at its Philadelphia office.

“[Avenue A] has clearly emerged as a leader in the sector,” Aronson said. “Its focus on analytics and technology to drive unprecedented client results has put it in a great position to capture a major part of the growth that will inevitably occur in this market.”

The acquisition is Avenue A’s first since October1999, when it acquired New York-based media-planning agency iballs, which was subsequently re-branded Avenue A/NYC.

McAndrews said Avenue A, despite its large cash trove, has been picky about acquisitions, looking for companies that are not only a good strategic fit but also profitable.

He said i-FRONTIER fit the bill, turning a profit in a tough market for online ad companies. i-FRONTIER expects to take in over $7 million in revenue this year, and McAndrews said it would immediately add to Avenue A’s earnings.

Last quarter, Avenue A reported a narrowed net loss of $678,000, while predicting it would be in the black in the fourth quarter.

In late October, Avenue A got out from under the shadow of the lingering privacy lawsuits haunting online ad technology providers, settling its federal and state class action lawsuits.

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