MSGi Unloads GrizzardMarketing Services Group Inc. has agreed to sell its Grizzard Communications Group to communications holding firm Omnicom Group Inc. for $91.3 million in cash.
Grizzard is an Atlanta-based direct marketing agency, which MSGi acquired in July 1999.
The sale represents a continued effort by New York-based MSGi to recover from financial difficulties. In January the firm sold off e-mail technology firm WiredEmpire and began reviewing strategic options with financial adviser Goldman Sachs in an attempt to maximize shareholder value.
In February MSGi cut staff and reorganized internally.
The agreement to sell Grizzard appears to be the next step in MSGi's quest for financial stability.
"As a result of [this] transaction, we have afforded ourselves many opportunities and have strengthened our balance sheet," Jeremy Barbera, chairman/CEO of Marketing Services Group Inc., New York, said in a statement. "At closing, we will have over $25 million in cash and no long-term or short-term debt. We view this transaction as an important step in our strategy to maximize shareholder value."
The deal is expected to close next month.
MSGi is expected to sign a strategic partnership agreement with Grizzard after the sale to continue the relationship between the two firms.