ChoicePoint Cancels Marketing Unit Sale
Data firm ChoicePoint Inc. is no longer actively seeking to sell its marketing services business. The unit, ChoicePoint Precision Marketing, has been re-classified as a continuing operation within the company.
“Despite our previously stated desire to divest this business, we have been unable to obtain a fair market price, particularly given the recent downturn in one of our leading customer segments, the mortgage market,” said ChoicePoint chairman and CEO Derek V. Smith in a statement.
ChoicePoint Precision Marketing employs around 670 individuals, and operates offices around the United States.
The decision marks a reversal from July, when the data firm said it would sell its direct marketing, forensic DNA and shareholder services. ChoicePoint is going ahead with the sale of the other units, and in September sold a separate business, Priority Data Systems, to the parent company of AMS Services.
As part of its decision to retain the unit, the Alpharetta, GA-based firm restated its quarterly financial results from 2005 and 2006. For 2005, ChoicePoint generated $1.01 billion in revenue and $235.3 million in operating income. The revenue growth rate of the marketing services unit fell by 2% during 2005, making it the only ChoicePoint unit to record a drop. Marketing services generated $91.5 million for the year.
Under the revised financial results, during the first nine months of 2006, ChoicePoint reported $788.4 million in revenue, and $181.4 million in operating income. The marketing services unit accounted for $60.1 million of the company’s revenue during that period. ChoicePoint projected that the unit would continue to see declines in its revenue through fourth quarter 2006.
ChoicePoint acquired notoriety in early 2005 after it was discovered to have sold consumer information to scam artists (Direct Newsline, March 6, 2005).
