Answerthink Exits Interactive Marketing Sector

NEW YORK Answerthink is divesting itself of the interactive marketing business it acquired from Think New Ideas in a deal valued at $231.2 million in 1999.

The Miami-based business and technology consulting firm said it will discontinue all of its online marketing operations, which recorded revenue of $1.5 million in the third quarter.

As a result, Answerthink expects to take a one-time hit of $3.5-4.5 million during the fourth quarter and Q1 2003, primarily for severance and lease exit costs. The company also plans to record a restructuring charge from continuing operations in the fiscal fourth quarter of $9-11 million, the bulk of which stems from closing the New York office that was used mainly by the interactive marketing business and relocating to a facility that better suits future requirements.

It was unclear how many staffers would be cut, and company officials could not be reached by press time. Answerthink currently claims about 800 staffers.

The company expects to receive a tax deduction of $70-85 million associated with the loss on the investment in Think New Ideas, and a total tax refund of $9.5 million during 2003. It also expects to recognize a net income tax benefit in the quarter ending Jan. 3 of about $2.5 million representing the remaining income tax carryback available for refund to the company.

Answerthink bought Think New Ideas, one of Omnicom Group’s former Internet investments, in mid-1999 for about $22 a share. The merger was intended to marry Answerthink’s strategic consulting strengths with Think New Ideas’ interactive marketing skills. At its height, Think New Ideas had offices in New York, Boston, Atlanta, Silicon Valley, Los Angeles, Seattle and London servicing clients like CarsDirect.com, Preview Travel and Mirage Resorts.

Answerthink stock (ANSR) was trading on the Nasdaq Wednesday at $2.54, up four cents or 1.6 percent. Its 52-week high is $8.34 and 52-week low is $1.43.