More NewsCMGI, Compaq Invest in Engage

CMGI, Compaq Invest in Engage

CMGI and Compaq make a multi-million investment, shoring up their interest in Engage.

In an indication that Engage has resources for cash other than the public markets, CMGI Inc.’s flagship advertising company on Tuesday rounded up $75 million in new financing from its parent and from computer maker Compaq Computer Corp.

Engage will issue around 5 million shares of common stock to CMGI and Compaq in return for investments of $50 million and $25 million respectively. The deal is based on a five-day average closing price of Engage stock ending with Monday’s 15-3/8 close.

Engage, which recently swallowed two of its sister firms and last week acquired MediaBridge in a $268 million stock deal, says it will use the new money to fund continuing operations. The deal puts Engage on more solid ground, financially, at a time when other firms — like CMGI’s AltaVista — have had trouble getting IPOs out.

When Engage reported results last week, it said it had $48.5 million in cash and cash equivalents on hand as of April 30. The company, as of April 30, had $90.3 million of cash, cash equivalents and marketable securities.

The new investment from CMGI and Compaq arises from the pact between the two companies forged in August 1999. At that time, CMGI acquired a majority interest in AltaVista Co. from Compaq, and the computer giant became the largest outside shareholder in CMGI. The companies also pledged to work together in the Internet space, and have pursued various deals that benefited both firms.

“The expansion of our strategic relationship with CMGI and Compaq signifies continued validation of our business strategy,” said Paul Schaut, president and chief executive officer of Engage.

“These commitments will help us continue the execution and expansion of our business strategy to deliver the power of the Internet through higher ROI to marketers into 2001.”

Related Articles

How to measure a multi-channel marketing strategy

Digital Marketing How to measure a multi-channel marketing strategy

1w Tereza Litsa
The future of retail: How IoT is transforming the retail industry

Digital Transformation The future of retail: How IoT is transforming the retail industry

1m Diana Maltseva
GDPR: The role of technology in data compliance

Data & Analytics GDPR: The role of technology in data compliance

8m Clark Boyd
What companies can learn from the We-Vibe lawsuit about the Internet of Things

Legal & Regulatory What companies can learn from the We-Vibe lawsuit about the Internet of Things

1y Al Roberts
Has advertising arrived on Google Home?

Media Has advertising arrived on Google Home?

1y Al Roberts
Target is the top retail digital marketer, so why is it struggling?

Ecommerce Target is the top retail digital marketer, so why is it struggling?

1y Al Roberts
YouTube is "on pace to eclipse TV" thanks to savvy algorithm use

More News YouTube is "on pace to eclipse TV" thanks to savvy algorithm use

1y Al Roberts
YouTube is getting rid of 30-second unskippable pre-roll ads

Ad Industry Metrics YouTube is getting rid of 30-second unskippable pre-roll ads

1y Al Roberts