NEW YORK -- SBI and Company said that it plans to acquire once-high-flying interactive agency, Razorfish, for about $8.5 million.
The deal calls for the Salt Lake City-based e-business roll-up to pay out $1.70 per publically held share for Razorfish's 5 million shares. The tender offer is scheduled to begin within ten business days and expected to close in the first quarter of 2003. The Razorfish name likely will be phased out over time, according to an SBI representative.
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 improve interactions between a company and its employees, customers and partners.
Through the purchase, SBI will gain 200 employees, bringing its total head count to about 950. Some general and administrative jobs may be eliminated as a result of the acquisition, but the company does not expect extensive cuts, according to the rep.
Razorfish CEO Jean-Philippe Maheu and CFO John Roberts will leave the company after a transition period, while COO Bob Lord will stay at SBI in a yet to be determined senior management role, said the representative.
SBI will add 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 keep both offices.) It also plans to retain Razorfish's client roster, which includes Western Union, Legg Mason, Microsoft, Avaya and the Los Angeles Department of Water and Power.
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]. Last year, SBI bought some assets of imploded marchFirst; the deal included the Chicago-based interactive agency's Portland, San Francisco and Denver offices and close to 300 employees.
Razorfish stock (RAZF) was trading on the Nasdaq small cap market at $1.67 Monday, up 0.06 percent.