CGI Holding Corp., the parent company of search engine marketing firm WebSourced, said this week it agreed to buy another SEM company, Proceed Interactive, in a deal that could be worth up to $7.9 million.
CGI Holding, Lake Bluff, IL, said the acquisition would increase its search marketing business by 15 percent. Proceed will add offices in Chicago, Dallas and Los Angeles. WebSourced is based in Morrisville, NC.
Proceed's client base includes General Motors, Omni Hotels and Wells Fargo. It expects 2004 sales of $3.6 million and has 35 employees, according to CGI Holding.
The deal calls for CGI Holding to acquire all of Proceed's shares in exchange for 666,000 CGI Holding shares. Proceed will receive an additional 666,667 shares based on the SEM hitting annual pre-tax earnings targets between $1.1 million and $2.1 million over the next four years.
Based on CGI Holding's closing stock price on Monday, the deal is worth between $3.9 million and $7.9 million.
After the transaction is complete, Proceed will continue to operate as a separate company. In addition to paid search management, Proceed provides services for media buying, contextual advertising and affiliate marketing.
WebSourced, which includes SEM KeywordRanking.com, has moved to diversify its service offerings beyond search marketing. In November, CGI Holding inked a deal to acquire MarketSmart Cos., a Raleigh, NC-based full-service agency.
Brian Morrissey covers search marketing for DM News.com. To keep up with the latest search marketing news subscribe to our free e-mail weekly newsletter Search Engine Marketing by visiting http://www.dmnews.com/cgi-bin/newslettersub.cgi
