Union Street acquires Razor, Archway for combined $110M

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In a move reflecting strong demand for outsourced marketing services, Union Street Acquisition Corp. has entered into definitive agreements to acquire direct and interactive marketing agency Razor Business Strategy Consultants LLC for $30 million and marketing operations management services provider Archway Marketing Services Inc. for $80.3 million.

Union Street views Razor and Archway as complementary businesses, with the combination of their operations creating a provider of end-to-end solutions from marketing strategy to outsourced execution. This will give clients the opportunity to outsource the full scope of responsibilities for a marketing program, including marketing strategy development, program budgeting, creative design, procurement, distribution, measurement and reporting of campaign results and evaluation of results.

“We expect solid industry fundamentals to continue to support demand for outsourced marketing solutions in the years ahead,” said A. Clayton Perfall, CEO and chairman of Union Street and CEO of AHL Services, in a statement. The transaction is also expected to provide capital to enable Union Street to pursue other acquisitions in what it sees as a highly fragmented.

The transaction is currently expected to close in the third quarter of 2008.

Razor was founded in 2003 and serves national marketers such as Domino's Pizza, Rent-A-Center, GameStop, Baskin-Robbins and Wendy's. It is focused on data analytics, segmentation, database marketing/CRM and digital communications. The Dallas, TX-based company's gross revenue totaled $17.1 million in 2007.

Archway Marketing Services Inc. is a subsidiary of AHL Services and was founded in 1953. It has 580 employees across eight North American facilities. Its primary focus is the operational components of outsourced marketing services, including program budgeting, logistics management, vendor management, sales portals, inventory management, fulfillment and distribution, customer care and analytics. The Minneapolis, MN-based company's clients include Target, General Motors, AstraZeneca, General Mills, JP Morgan Chase and Microsoft. In 2007, its revenue totaled $89 million, representing a two-year annual growth rate of 16%.

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