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MessageMedia Acquires Revnet, Eyes Other E-Mail Firms

MessageMedia Inc. plans to begin aggressively acquiring other e-mail marketing firms over the coming months, and president/CEO Larry Jones sums up the rationale for his company's intentions with one word: “Scale.”

“This is a market forming right in front of us right now,” Jones said. “The e-mail services, business services side that go around e-mail … is a brand new space. We're running fast. We're the only public company in this space and we're trying to leverage that public currency to make sure that we win.”

Jones told DM News that the Boulder, CO, company has acquired Revnet Systems Inc., Huntsville, AL, in an agreement valued at approximately $46 million of Message Media common stock. It should go ahead within 30 days providing the parties can reach a definitive agreement within this time.

Revnet is a developer and supplier of e-mail marketing software and services and owns a suite of database-enabled email list management products and service. It has a client base of hundreds of organizations in 35 countries worldwide, it said.

The deal marks Message Media’s first move toward a planned series of acquisitions of e-mail marketing companies, in which it is targeting technology-based and European companies in particular.

MessageMedia already is the front runner in the e-mail services race, followed by Digital Impact, San Mateo, CA, and Denver-based Exactis.com Inc., formerly known as Infobeat. MessageMedia bills customers per e-mail for newsletters, database marketing messages, customer service e-mails, and e-commerce communication such as electronically-delivered shipping notifications.

Jones said he expects at least one acquisition domestically within the next couple months. The company will set a plan for European expansion this summer and make acquisitions sometime afterward.

MessageMedia hired Jones in March, largely because of his experience with buying and building companies. He joined the company from McCown DeLeeuw and Co., a private equity investment firm. Prior to that Jones held the top jobs at direct marketing services concern Neodata Service Inc. and the information service unit of Wang Laboratories.

MessageMedia recently formed an internal mergers and acquisition group and hired David B. Ehrenthal as vice president of international development to oversee overseas expansion.

Though the company has received two private equity investments totaling roughly $40 million since December, Message Media likely will make the anticipated acquisitions through stock, Jones said. The company is unprofitable, but with a market capitalization of more than $300 million, it is in no hurry to move into the black, he said.

“It's not really a focus of ours right now,” Jones said. “With that kind of market cap, the market's telling us to grow.”

The company was formally launched in December after First Virtual Holdings Inc. acquired two firms, Email Publishing Inc. and Distributed Bits LLC, and consolidated the new entity under the MessageMedia name. Major clients for the company include Standard & Poor's, E*Trade, GeoCities and USA Today.

This month, MessageMedia agreed to deliver monthly e-mail newsletters for interactive cartographer MapQuest.com Inc., New York. Terms of the pact were not disclosed.

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