Gupta Wants to Buy All of infoUSA, Take It Private

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InfoUSA, Omaha, NE, said after the close of the market yesterday that it received an offer from Vin Gupta & Co. LLC -- which is controlled by the firm's chairman/CEO Vin Gupta, who owns 38 percent of infoUSA's common stock -- to acquire the rest of the shares and take the company private.


The proposal would have Gupta pay $11.75 in cash for each outstanding share he does not own. InfoUSA's stock closed at $9.40 yesterday.


In a letter to the company's board of directors, Gupta said, "This proposed price represents a 25 percent premium to today's closing share price."


On June 8, infoUSA revised its revenue and earnings guidance for fiscal 2005 because of what it called weakness in revenue of its Donnelley Marketing unit and its small business group.


Two days earlier, it said it would discontinue its wholesale pricing discount structure effective July 1, taking discounts from the 80 percent to 90 percent range to 30 percent. In that announcement the company said, "The average price of circulation and response lists is $120 per thousand or higher. InfoUSA's average list price on business lists is $80 per thousand and on consumer lists is $45 per thousand. InfoUSA spends over $40 million in compiling and updating its various databases. It is no longer a commodity as it was in the past."


All this followed what seemed to be a strong first quarter for infoUSA. Profit more than doubled to $9.06 million versus $4.37 million in first-quarter 2004 as net sales rose to $95.1 million from $80.8 million, according to the company's earnings report. Operating income was $15.6 million, up from $9.2 million for the first quarter of the prior year.


At the time, infoUSA attributed its revenue growth to sales of its recently launched subscription products and successful integration of recent acquisitions. The company bought retention-based e-mail technology firm @Once in February. It made several acquisitions in 2004, including service bureau Triplex Direct Marketing, business data firm OneSource Information Services and list firm Edith Roman Associates.


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