CMGI (Nasdaq: CMGI) added to its rapidly expanding network of Internet companies Monday with an acquisition to strengthen its B2B focus. The company said it will buy Tallan, an Internet and e-commerce services company, for about $920 million.
Shares in CMGI closed at 112 1/16 Friday, down from their recent 52-week high of 163 1/2. CMGI last week bought uBid (Nasdaq: UBID). Plenty of companies are trying to imitate the success of CMGI's part mutual fund, part publicly traded venture capital firm business model, though few can compare. Tallan, a privately held company, was formerly known as Business Data Services (BDS).
CMGI will integrate Tallan with its growing CMGI Solutions organization, accelerating its ability to deliver end-to-end e-business products, the company said. At launch last December, CMGI Solutions had an annualized run rate of more than $14 million dollars and has seen growth in excess of 100 percent per quarter. This acquisition will grow CMGI Solutions' billable resources by 350 percent, the company said, enabling rapid time to market and deeper expertise in e-business applications
CMGI Solutions will integrate Tallan's capabilities in electronic commerce development, including data warehousing, data mining, and online transaction processing systems. Tallan's current client base includes leading web retailers, manufacturers and services companies, such as EMC (NYSE: EMC), Barnes & Noble (NYSE: BKS), Priceline (Nasdaq: PCLN) and Ingram Micro (NYSE: IM).
Jack Hughes, CEO of Tallan, will become chief operating officer of CMGI Solutions and report directly to Ronald E. Spears, CMGI Solutions' president and CEO. Mr. Hughes will also join CMGI Solutions' Board of Directors.
The acquisition is expected to close in May 2000, following regulatory approvals and customary closing conditions