Engage Technologies Inc. (Nasdaq: ENGA), which tracks online customer tastes, on Thursday said it would acquire Adsmart and Flycast Communications Corp. from its majority owner, venture capital company CMGI Inc,. in an all-stock deal.
Based on Engage's Wednesday closing price of $77, the 32 million share deal is valued at about $2.6 billion. Engage launched its IPO in July.
The acquisitions are part of CMGI's (Nasdaq: CMGI) larger strategy to form a single, more powerful organization that will create and deliver the next generation in online advertising and marketing, the company said. The group is expected to compete against online advertising network DoubleClick Inc. (Nasdaq: DCLK)
CMGI acquired Flycast last September and Adforce a few months before that.
Under the terms of the agreement, Engage will immediately oversee the operations of Adsmart an Internet ad-buying network and ad space seller Flycast, both of which will be integrated with Engage, the company said.
David Wetherell, chairman and CEO of CMGI, will continue to serve as Engage's chairman. Paul Schaut will remain Engage's president and chief executive. George Garrick, chairman and CEO of Flycast and John Federman, president and CEO of Adsmart will join Schaut in the office of the president to oversee strategic operations for the combined company.
Wetherell said that the reshuffling is a move to fulfil CMGI's "larger vision for a single, highly integrated Internet marketing company that represents the next generation in online marketing solutions."
The combined company is designed to connect marketers with specific online audiences, retain buyers and create customer loyalty.
The deal, which will be accounted for as a combination of entities under common control, is subject to the approval of Engage shareholders. It is expected to close in April or May.
Reuters contributed to this report.