Infogroup is close to being purchased by CCMP Capital Advisors, according to the Omaha World Herald.
A spokesperson for infoGroup would not comment on the story. A call to CCMP was not returned by deadline.
According to the World Herald, CCMP, a private equity firm based in New York City, has offered $8.60 per share of infoGroup’s stock. If true, this would value the transaction at just under $500 million. InfoGroup’s stock closed at $8.03 per share on Friday.
Rumors about infoGroup being on the selling block have been bubbling since last October, although the company has never confirmed it has sought suitors. In February, the company let around 40 employees, including several in upper management. Current CEO Bill Fairfield has been operating under a contract that calls for his employment to be on an automatically renewing quarter-by-quarter basis, with both himself and the company able to terminate it.
While founder Vinod C. Gupta is no longer involved with the company’s day-to-day operations, he does sit on its board, and is its largest shareholder.
CCMP’s Web site touts the firm as specializing in buyouts and equity investments in companies ranging from $500 million to more than $3 billion in size. Its traditional investment industries have included consumer, retail and services; energy; healthcare infrastructure; industrial; and media and telecom.
CCMP currently holds investments in Aramark Corp., Edwards Limited, Generac Power Systems, Grupo Corporativo ONO, Legacy Hospital Partners, Quiznos Sub and Warner Chilcott, among others.
Late Friday, infoGroup’s annual financial report to the Securities and Exchange Commission (SEC) was released. According its most recent financial report, infoGroup recorded fourth-quarter sales of $125.8 million, an 11% drop from the $141.9 million it pulled in during fourth-quarter 2008. The company recorded a $2.4 million net loss for the quarter, compared with $2.4 million in net income a year earlier.
For the full year, infoGroup sales stood at $499.9 million, down from $588.7 million in 2008. Additionally in 2009, infoGroup took a $6.8 million net loss, compared with net income of $4.8 million. The quarter and the year ended Dec. 31.
The financial document released on Friday paint a more detailed picture of infoGroup’s operating units than the earlier earnings statement. According to it, in 2009 the data group, which includes the company’s database and database marketing solutions offerings, generated $255.8 million in 2009, representing just over half of the company’s revenue. In 2008 this group pulled in $309.5 million (52% of revenue), and in 2007 it generated $330.5 million, or 61% of revenue.
InfoGroup attributed the revenue drop to aggressive pricing by competitors, which forced the company to lower its revenue as well.
Its services group, which includes its list brokerage and management operations as well as its Yesmail and Donnelley units, pulled in $136.8 million, or 25% of its 2009 revenue, compared with $163.3 million or 28% of its revenue in 2008, and $146.2 million or 29% in 2007. According to infoGroup, the revenue falloff reflects lower volumes for mailing as customers move to digital channels. The services group’s digital business did see 4% growth, spurred by increased attention on e-mail and cellular text marketing by customers.
The papers also showed that list brokerage trade accounts receivable decreased to $81 million as of Dec. 31, from $86.8 million as of Dec. 31, 2008. List brokerage trade accounts payable dropped to $65.9 million from $79.8 million during the same period. The company attributed the declines in declines to the weakened economy, as well as the timing of receipts and payments, which it said are occurring more frequently than in the past. The papers went on to say list brokerage trade accounts payable decreased more significantly than list brokerage trade accounts receivable as the industry continues to move toward e-mail deployment, where it makes a higher margin and earn certain fees that reflect a receivable but no offsetting payable
InfoGroup’s marketing research group pulled in $77.4 million, or 14% of 2009’s total revenue, compared with $115.9 million in 2008 and $97.9 million. During the latter two years, market research made up 20% of the company’s revenue.
Each of these was affected by acquisitions and – in the case of the marketing research group – divestitures. Some of the more prominent acquisitions during 2007 through 2009 include NWC Research, Guideline Inc. and Northwest Research Group in the Research Group; Seco Financial in the data group, and direct media inc. in the Services Group. The company also sold off its Macro International social research company in early 2009.
According to the SEC document, Gupta received the second of two payments of $5 million apiece on Oct. 30. Gupta is also in the process of paying the company $9 million as part of his severance agreement. Thus far he has paid $4.4 million, with the balance payments due in 2011, 2012 and 2013.
