Responsys to acquire Smith-Harmon

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E-mail marketing firm Responsys has agreed to acquire digital marketing consultancy Smith-Harmon in a part-cash, part-stock deal. Financial terms of the agreement, which is expected to close next month, were not disclosed. For the near future, Smith-Harmon will continue to operate as an independent brand, known as “Smith-Harmon, a Responsys company.”

“They have fantastic talent, and as we continue to grow our business, we are constantly on the lookout for talent,” said Dan Springer, CEO of Responsys. “We have seen their name a lot lately, as we share a lot of clients.”

The two companies have worked together for clients including Orbitz, Salesforce.com and Disney. For the near future, Smith-Harmon will continue to operate as an independent brand, known as “Smith-Harmon, a Responsys company.” However, Springer said that he expects the brand to eventually come under the Responsys banner.

There will be no layoffs as a result of the deal. Founders Aaron Smith and Lisa Harmon will continue to lead Smith-Harmon and will take on management of some current Responsys staffers. Smith and Harmon will report to Ed Heinrich, VP of professional services at Responsys.

“It seemed like a no-brainer,” said Lisa Harmon, co-founder of Smith-Harmon. “We will be able to offer clients more from a strategy, technology and creative services point of view.”

Smith-Harmon will remain in Seattle, but will move to a larger office next month.  Responsys is headquartered in San Bruno, CA.

The acquisition will also potentially add new clients to Responsys' roster.  Smith-Harmon clients include Pottery Barn, REI and Costco.com.

Responsys, which reported a 51% increase in message volume in the first seven months of 2009, as well as a 60% increase in revenue in Europe, is considering additional acquisitions, added Springer.

“The bad economy has left a lot of companies to have challenges to meet their growth objectives, and we get more and more calls from companies looking to be brought into the Responsys fold,” said Springer. “But we are being very selective and only looking at top talent. We won't acquire just to grow, only if it makes us stronger.”

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