Cambridge, Massachusetts-based Sapient issued 790,675 shares of common stock to Adjacency shareholders for a full equity interest in the company. Adjacency, which has 57 employees, will remain in San Francisco and operate as a division of Sapient. The deal closed today.
Adjacency offers clients strategic consulting, interactive design, technology development, and management of Internet and e-commerce applications. The firm's rivals include Agency.com, Scient, Viant, USWeb/CKS. Adjacency has built retail sites for such clients as Virgin Entertainment, Nordstrom, Caterpillar, and Land Rover.
This latest acquisition is part of Sapient's strategy to provide a full menu of Web-based business services, from designing Web storefronts to connecting businesses to their suppliers and customers online. To fill out its creative offerings, Sapient bought interactive design firm Studio Archetype in August 1998.
Recently, Sapient and Studio Archetype together have competed against Adjacency for business, said Nikki Fisher, Sapient's vice president of marketing.
"We'd much rather be joined with them than competing with them," Fisher said.
Through the deal, Sapient assumed all of Adjacency's outstanding stock options, exercisable for approximately 63,272 shares of Sapient stock. The acquisition will be accounted for as a pooling of interests and is expected to include a one-time acquisition charge.
Sapient's stock soared 13.78 percent today to close at $64 a share.