Cordiant to Acquire MicroArts in Stock Deal

Cordiant Communications Group has agreed to acquire MicroArts Corp., a marketing and Web design agency specializing in technology clients, Cordiant said last week.

Terms of the all-stock transaction call for MicroArts to merge with Cordiant’s global e-business practice, CCG.XM. MicroArts will receive $44 million in Cordiant stock immediately. Based on meeting productivity and growth goals over the next three years, MicroArts shareholders could receive $87 million total in stock.

The deal had been in the works for 4-5 months, and is expected to close this week.

MicroArts will retain its name and business goals, said Kurt Aldag, director of public relations for the Portsmouth, N.H., company. There will be no management shifts or layoffs as a result of the merger, he added.

“The principal reason we bought [MicroArts] is because we believe in the skill sets, talent, methodology and approach these guys take,” said CCG.XM chief executive Ian Smith. “Their business is very compatible with where we want the company to go,” he added, citing MicroArts’ focus on Internet-related strategy, technology and marketing.

“Our clients were growing, our client base was growing, and we needed to establish offices elsewhere,” said Aldag, pointing to clients such as THINQ, which is based in England, and HoustonStreet.com, which recently launched a European version of its Web site.

The deal expands New York-based CCG.XM’s interactive capabilities and gives MicroArts, with clients such as Hasbro Interactive and RedHat Software, access to CCG.XM’s global operations and clients, including Compaq, Nokia, Coca-Cola and Unilever.

There were no client conflicts as a result of the merger, Smith said.

MicroArts had 2000 revenue of more than $13 million, a 129-percent jump over 1999, Aldag said. The firm has 67 employees, double the number it had a year ago.

Cordiant shares, which are traded on the New York Stock Exchange under the CDA symbol, were at about $22 last week. The company is also listed under CRI on the London Stock Exchange.