Austin-based online coupon company RetailMeNot, one of Austin’s most high-profile publicly held software companies, said Monday it has agreed to be acquired in a deal valued at $630 million.
Harland Clarke Holdings Corp. is buying all the outstanding shares of RetailMeNot common stock at $11.60 per share.
Founded in 2009, RetailMeNot operates the largest online marketplace for coupons and consumer deals. Its sites and mobile apps provide coupon codes, free trials and other retail offers from more than 70,000 merchants including Macy's, Nordstrom, Wal-Mart and Target.
Harland Clarke, based in San Antonio, provides integrated payment solutions and marketing services.
Under the deal, Harland Clarke will acquire all outstanding shares of RetailMeNot Series 1 common stock for $11.60 a share.
The purchase price represents a premium of about 50 percent over the closing share of RetailMeNot’s common stock on April 7, and a premium of about 36 percent over the average closing share price for the 60 calendar days ended April 7.
Harland Clarke valued the deal at about $630 million.
The acquisition, approved by both companies’ boards, will have to pass regulatory approval. It is expected to close in the second quarter of 2017.
Officials said the combined companies will create a multi-channel network of thousands of advertisers reaching hundreds of millions of consumers around the world.
“This is an exciting and important milestone for RetailMeNot,” said Cotter Cunningham, RetailMeNot founder and CEO. “Not only are we delivering an immediate and significant cash premium to our stockholders, but we are also meaningfully advancing our goal of becoming a leading savings destination for consumers. This acquisition is a testament to the unwavering commitment and hard work of our 500-plus dedicated employees.”
The agreement means that Austin will lose another well known publicly held tech company. Although strong public companies help put the region on the map as a place to build successful companies, it’s also likely that being acquired will allow RetailMeNot to expand at a faster pace.
After being acquired by Expedia in 2015 for $3.9 billion, Austin’s HomeAway, which operates the world’s largest network of online vacation rentals, has undergone a significant expansion in Austin.
The RetailMeNot deal “is a measure of success, and $630 million is a good price, so Austin should congratulate itself for being such a good incubator,” said Kirk Walden, an adjunct business professor at Texas State University and principal of Walden Consulting. “To me the good news is they’re still in Texas. Most likely, RetailMeNot will grow faster because it’s been acquired. It will have access to more resources. Even though integration is often painful, it is very likely they will continue to expand, and expand at a faster rate.”
But Austin also needs to add more high-profile names to its roster of publicly traded technology companies, he said.
“Successful companies that people have heard of is the kind of indicator that ties to the Austin brand,” Walden said. “We need some more of them please. Come on, we really do.”
Harland Clarke Holdings is a wholly owned subsidiary of MacAndrews & Forbes and is owner of Valassis, which provides media and marketing services worldwide. Valassis is one of the largest coupon distributors/processors in the world.
“RetailMeNot’s capabilities span multiple platforms and channels including web, mobile and app, delivering online coupons and sales, discounted gift cards, and cash back offers,” said Victor Nichols, CEO of Harland Clarke. “The addition of RetailMeNot brings Valassis’ clients a new, vast and active consumer base explicitly seeking deals, offers and savings.”
Shares of RetailMeNot soared last quarter after the company beat Wall Street expectations. RetailMeNot posted fourth-quarter net income of $2.4 million, while revenue for the quarter increased 17 percent from a year ago to $96.9 million.
In recent years, RetailMeNot has invested in a strategy to move beyond its traditional niche - desktop computer transactions - to focus on its fast-growing mobile business.
In the fourth quarter, mobile online transactions net revenue was up 8 percent, while desktop online transaction net revenue declined 20 percent.
Last year, RetailMeNot paid $22 million to acquire GiftCard Zen, a Phoenix-based startup that buys and sells gift cards online.
“I firmly believe that Valassis not only shares our commitment to consumers and merchant partners, but supports continued innovation in driving new solutions for retailers and brands,” said Cunningham, who will remain at RetailMeNot as CEO.
This story will continue to be updated.
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