infoUSA, Omaha, NE, will fold its Walter Karl list services unit and its Database America division into its recently acquired Donnelley Marketing Division, combining all of its operations that provide data to large-business clients into a single operating entity. Placing related businesses into a single division will facilitate the marketing of each group’s products to the other’s customers, the company said.
It tapped Susan Henricks to head the combined operating division as president and chief operating officer. Henricks joined infoUSA earlier this year as executive vice president, after serving as managing director of client development at First Data Corp. Atlanta. A 25-year veteran of direct marketing, she also served as president and CEO of Metromail Corp., Lombard, IL, before First Data sold it to Experian, Orange, CA, last year.
“She had been working for a number of years with these large-business customers, so when we acquired Donnelley Marketing, naturally we saw that it was a great fit,” said Laurel Gottesman, director of investor relations at infoUSA.
Vinod Gupta, chairman/CEO of infoUSA, said that Henricks helped integrate the company’s acquisition of Donnelley Marketing, which was completed this summer.
“Susan’s 25 years of industry experience and expertise with large-business customers make her ideally qualified to lead our growing Donnelley Marketing Division,” he said in a prepared statement.
Analysts said the combination of the divisions into a single unit makes sense because they have similar customer bases, making it easier for sales staff from each of the three units to take advantage of cross-marketing opportunities.
“I think the overhead should be less,” said Robert Anderson, a securities analyst at Kirkpatrick Pettis, Omaha. “A combination of the three companies should eliminate, perhaps, some duplication of activities.”
Gottesman said no layoffs were expected as a result of the merger of the divisions, however.
“The advantage is that combining the large-business services of Donnelley Marketing with the large-business services of Database America and Walter Karl gives us kind of a core competence in servicing those customers,” she said. “It allows for cross-marketing opportunities with a much greater product line.”
As an example of a synergy between Database America and Donnelley Marketing, Gottesman pointed out that customers of the Donnelley Marketing databases might also be interested in using the analytical tools offered by Database America.
“We can enhance the products and solutions that we can offer them,” she said.
Under the new alignment, Al Ambrosino, the head of Database America, will report to Henricks. He previously reported directly to Gupta. Sheldon Zaslansky, the president of Walter Karl, will continue to report to Ambrosino.
“It’s a good thing,” said Zaslansky of the combined businesses. “It makes a lot more sense, actually. That side of the business understands this side of the business a lot better.”
With projected sales of more than $100 million, the combined division will account for about half of infoUSA’s annual revenues. InfoUSA had sales of about $228.7 million in 1998, and is projecting sales of about $320 million for the current fiscal year, according to Gottesman.
In a separate announcement, infoUSA said it planned to combine its stock into a single class, ending a previous system in which it sold A and B shares, each of which had different voting privileges. The proposal for the one-for-one exchange of the classes will be considered at a special meeting of shareholders on Oct. 21.
Anderson, the analyst, said the move was expected.
“I think they just recognized the confusion they were causing with the stock,” he said, noting that the separate classifications – sometimes done to provide large shareholders with liquidity without decreasing their voting power – might have repelled some potential investors.