SBI Completes Razorfish Acquisition

NEW YORK SBI and Company said that it has completed its $8.5 million acquisition of once-high-flying interactive agency Razorfish.

In November, the Salt Lake City-based e-business roll-up agreed to acquire Razorfish for about $8.5 million, or $1.70 per publicly held share [IQ Daily Briefing, Nov. 25, 2002]. As a result of the merger, Razorfish is now wholly owned by SBI and its shares are no longer traded on the Nasdaq.

Founded in 1995 by Jeff Dachis and Craig Kanarick, Razorfish came to exemplify the arrogance and excessiveness associated with the go-go days of the late ’90s. The New York-based i-shop, at one time partly owned by Omnicom, profited greatly during the dot-com boom and suffered with as much intensity during the bust. Today, Razorfish specializes in building “extended enterprise portals,” or Web-based applications that are intended to improve interactions between a company and its employees, customers and partners.

Through the purchase, SBI gains 200 employees, bringing its total head count to about 950. SBI also adds outposts in New York, Boston, Los Angeles, San Francisco and Silicon Valley. (In Boston and San Francisco, SBI will combine its existing operations with Razorfish’s and in New York, the company will maintain both offices.) It also plans to retain Razorfish’s client roster, which includes Western Union, Cisco Systems, Avaya and GlaxoSmithKline.

Over the past two years, SBI has grown by snapping up troubled Internet companies like Razorfish. The company recently completed its acquisition of Scient, a New York-based technology consultancy that had filed for bankruptcy protection [IQ Daily Briefing, Oct. 2, 2002]. Last year, SBI bought some assets of imploded marchFirst; the deal included the Chicago-based interactive agency’s Portland, Ore., San Francisco and Denver offices and nearly 300 employees.