SAN FRANCISCO (MarketWatch) — DoubleClick Inc., once the leading buyer of online advertising for other companies, said Monday it agreed to be acquired by San Francisco-based private equity firm Hellman & Friedman for about $1.1 billion in cash.
said in a statement its shareholders will receive $8.50 a share, representing no premium over the stock’s Friday closing price of $8.57. The shares surged about 20 percent last week on speculation of an acquisition. DoubleClick had said in November it hired the banking firm Lazard Freres to explore a possible sale.
JMI Equity, a San Diego- based venture capital firm, also will be investing in the transaction.
The firm has seen its key position in the Internet advertising market eroded as more businesses use keyword search advertisements from Google Inc.
and Yahoo Inc.
to sell their products online.
DoubleClick’s sales rose 11 percent last year with the help of several acquisitions, just a fraction of the growth posted by Yahoo and Google.
Hellman & Friedman plans to break the company into two separate business units, each with its own new chief executive, and will install a new board to oversee both businesses, DoubleClick chief executive Kevin Ryan said on a conference call.
Ryan will resign from his post and leave the company after the close of the transaction, expected in the third quarter.
David Rosenblatt will continue to oversee the TechSolutions division as its CEO, and Brian Rainey will continue to lead the DataSolutions division as its CEO.
DoubleClick’s stock once traded above $130 a share during the dotcom boom in 2000. The company fell on hard times after the Internet bubble burst and reported steep losses for three years.
It survived the crash by recasting itself as a provider of data services and technology to direct marketing firms.
Hellman & Friedman has raised and managed more than $8 billion, investing in about 50 companies. Among its investments was a stake in Young & Rubicam, a top advertising firm.
Shares of DoubleClick fell 43 cents, or 5 percent, Monday to $8.14 as some investors who were hoping for a higher takeover price sold their shares.
Last week, DoubleClick Inc. said it swung to a quarterly loss even as sales rose 12%, with the advertising technology company’s operating expenses ballooning.
The New York-based company, which places online ads for other businesses, reported a first-quarter loss of $917,000, or 1 cent a share, compared to a profit of $7.7 million, or 5 cents a share, a year ago. Sales rose to $76.3 million from $68 million. See full story.
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