Snyder Communications is hoping a planned separate stock offering for its interactive units, now joined under the banner Circle.com, will yield a new source of revenue to fuel expansion plans.
And as the stock will initially only be available to employees and existing shareholders as a dividend, the agency holding company believes the offering will become a “recruitment and retention tool which should make a vast difference in how we build our business,” said Eric Snyder, co-founder of Circle Interactive in Boston, one of the units inside Circle.com. The stock will become available for public trading later this year.
“The idea of coming out as a separate entity is to invest in our own growth … This addresses some very specific growth needs,” said Snyder (who is not related to parent company founder Daniel Snyder). Growth will be welcome at Snyder right now-its stock was languishing near a 52-week low, around $28 11/16 at press time.
A separate offering to the existing Snyder stock, a so-called “trading” stock, will allow investors to value the performance of Circle.com independently to the moribund shares of its parent.
General Motors was the first to create such a stock in 1984 when it acquired Electronic Data Systems.
Circle.com will be comprised of all the Internet-related businesses owned by Snyder, including Circle Interactive and Blau Marketing Technologies in Wilton, Conn. Also being folded into Circle.com is the interactive unit of Ingalls, Moranville (formerly known as Rockpile Interactive) in San Francisco and a U.K. office of Brann Ltd.
Heading up Circle.com as chief executive officer is Bob Wilke, a Blau executive since 1983. Eric Snyder will be the president. Circle.com executives are expected this week to detail the plan to investors.
Circle.com employs 250 people and estimates 1999 revenues in excess of $40 million. Clients include BMW, the small-business division of IBM, Bell Atlantic, and WSJ.com.