Avenue A Purchases I-Frontier

NEW YORK — Avenue A has purchased Philadelphia interactive agency, i-Frontier, for an undisclosed sum, the Seattle-based digital marketing and technology company said Tuesday. Terms of the cash deal call for Avenue A to make a down payment now and pay the remainder over the next four years based on i-Frontier’s performance.

“We wanted to take the organic growth we’ve been seeing and support that by making a strategic acquisition on a selective basis,” said Avenue A president and CEO Brian McAndrews. “First and foremost, i-Frontier’s profitable, which is attractive in this environment.”

Through the purchase, Avenue A gains a seven-year-old, 58-person shop that is expected to exceed $7 million in revenues this year from a client roster dominated by pharmaceutical companies. About 80 percent of i-Frontier’s work comes from drug marketers like Wyeth, AstraZeneca and Novartis.

Avenue A also adds i-Frontier’s creative and Web site development capabilities to its technological and online media planning and buying offering. “For new business, it will strengthen our overall offering,” said McAndrews.

The newly acquired agency, which will operate as a subsidiary of Avenue A, will retain its brand identity, as well as its 12-person management team lead by i-Frontier founder and president Brad Aronson. Aronson, 31, will report to McAndrews, 43.

Avenue A’s other units include Avenue A/NYC and Atlas DMT, a Seattle-based advertising technology provider. Before the purchase, Avenue A had about 267 staffers and projected 2002 revenues of $123-126 million, said McAndrews. Accounting for the i-Frontier acquisition, Avenue A now claims $165-170 million in billings, he said.

As for future acquisitions, McAndrews said, “Certainly, we’ll continue to be open to this kind of acquisition,” but declined further comment.

Avenue A (AVEA) was trading on the Nasdaq Tuesday at $3.37, down four cents. Its 52-week high is $3.65 and 52-week low is $1.20.