Yahoo! to Acquire interclick

Brett Maas — Tue, 01 Nov 2011 17:55:54 +0000

Acquisition Extends Yahoo!’s Audience Targeting Capabilities and Premium Content Supply

By Himank Sharma

(Reuters) – Yahoo Inc will pay $270 million for interclick inc as it tries to revive its ailing online advertising business, even as the search and advertising giant continues to scout for potential bidders.

Sunnyvale, California-based Yahoo is paying $9 per share, or about a 22 percent premium, for the online advertising technology firm.

Yahoo shares slid 5 percent in morning trade on Nasdaq.

Yahoo, plagued by stagnating growth in its U.S. business and a rift with key Chinese partner Alibaba, had fired its chief executive in September and has been exploring strategic alternatives — including a potential sale.

“Yahoo does not have much leverage right now, they got no CEO, everyone knows they are up for sale … so how much pricing power does that give them? (with potential buyers),” BGC Partners analyst Colin Gillis said.

Among the parties interested in Yahoo are private equity firms Silver Lake, TPG Capital, Bain Capital, Blackstone, Kohlberg Kravis Roberts, Providence Equity Partners, Hellman & Friedman, Carlyle Group, and Russian technology investment firm DST Global, apart from rivals Microsoft Corp and Google Inc.

“It’s not a transformational acquisition, but it helps Yahoo in a market they are not strong in … they have to take some steps to keep pushing forward.”

Interclick, with annual revenue of about $102 million, helps advertisers identify online target audience through its open segment manager analytics platform.

Yahoo said it expects to use interclick’s offerings for its own display advertising business.

The crowded advertising technology sector is dominated by a slew of small players and start-ups but has seen some of the biggest deals over the years. Google bought DoubleClick, in 2007 for $3.1 billion while eBay acquired GSI Commerce for $2.4 billion earlier this year.

GCA Savvian Advisors LLC acted as the lead financial adviser to interclick in connection with the transaction.

Yahoo shares fell to $14.04 in morning trade On Monday.

Shares of interclick soared 21 percent to $8.94. (Reporting by Himank Sharma in Bangalore; Editing by Joyjeet Das and Gopakumar Warrier)

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