Aspen Marketing Services Inc. paid $3.2 million on Sept.28 to acquire Newgen Results Corp., a teleservices and database-marketing subsidiary of TeleTech Holdings Inc.
Aspen also signed a two-year agreement to license software from TeleTech. For this, it paid $225,000 at the closing, and agreed to pay an additional $2 million within 12 months.
The licensing agreement also requires Aspen to pay an annual royalty fee equal to 5% of the gross revenue it receives, as a result of using TeleTech’s marketing software.
In documents filed with the federal Securities and Exchange Commission, TeleTech reported that Newgen had experienced revenue declines and operating losses, which had stabilized, and that the anticipated time it would take to return the business to profitability was not acceptable.
TeleTech estimated it would its total costs for restructuring and loses due to the sale of Newgen would range from $5.6 million to $6.6 million. These figures include $1 million in costs related to termination of employees, including severance pay.
Newgen’s automotive dealership client customer base and its interactive voice response (IVR) system for telemarketing was what made the deal attractive to Aspen, according Tim Hanlon, executive vice president and managing partner at Aspen.
Like Aspen, Newgen provides service telemarketing services to auto dealers, handling calls from customers making appointments and providing other database marketing services. Aspen plans to significantly expand it call volume as a result of this acquisition.
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