InfoUSA To Buy Donnelley Marketing from First Data Corporation

InfoUSA, Omaha, NE, will purchase Donnelley Marketing, a consumer database marketing company, from Atlanta-based First Data Corp. The purchase price is $200 million in cash, and the deal is expected to close in July. Donnelley has annual revenue of $90 million.

First Data president and COO Charles Fote will join InfoUSA’s board of directors following the close of the sale. First Data Corp. expects to report a second-quarter after-tax loss of $15 million on the sale. Under a series of long-term licenses, InfoUSA will provide First Data with consumer and business information and database processing services.

In an interview with DIRECT Newsline, InfoUSA chairman and CEO Vinod Gupta said Donnelley would not be incorporated into InfoUSA’s Omaha, New York, or New Jersey offices, and that the Donnelley Marketing brand would be kept intact, with the company operating as a separate subsidiary. “It has a lot of brand name cache,” said Gupta.

Donnelley Marketing’s fit with InfoUSA may be better than it was with First Data. “We had been taking a look at all of our businesses – the growth targets and the strategic objectives,” said a spokesperson for First Data. “We felt that Donnelley would be better able to achieve its objectives by combining with another player. First Data is going to focus on transaction processing, electronic payment services, e-commerce solutions.”

InfoUSA will amortize $200 million in goodwill from the sale over 15 years, although this will be excluded from InfoUSA’s earnings before interest, taxes, depreciation and amortization. InfoUSA has received a conditional letter of financing commitment from Bankers Trust Company. InfoUSA had 1998 revenue of $228.7 million and operating income of $2.6 million.