Carter Malloy, an equities research analyst with investment bank Stephens, said an infoGroup consolidation will solidify its leadership position, which had never been apparent.
“It's a very fragmented industry, especially on the list management and brokerage side,” Malloy said. “It is the right move to consolidate a lot of the disparate brands, many of which are doing similar work.”
The company currently is divided into three business units, focusing on data, services and marketing research. Onlookers say that many current infoGroup companies simply will be subsumed into the appropriate groups, which themselves will be given more prominent, stand-alone branding.
“The new infoGroup Nonprofit is a good example,” said Jay Schwedelson, corporate VP at database company Worldata. “This represents a very clear path, where various segments all become infoGroup-related.”
InfoGroup's consolidation comes amid rumors that the company is actively seeking a buyer. Gupta has urged a sale several times, and in late 2008 the company hired financial adviser Evercore Partners to help determine future plans, a sale of the company being among them.
In November, the Omaha World-Herald
reported that at least 33 potential bidders had signed confidentiality agreements with the company to allow access to financial information to prepare offers. InfoGroup did not deny the report, saying that it is “continually evaluating the operations and prospects for the company to determine what course is best for our shareholders.”
Although several companies have been cited as potential buyers—among them Dun & Bradstreet, private equity company Carlyle Group, data quality and services company Experian, and marketing services company Acxiom—both Frankland and Malloy dismissed these possibilities.
“There is good potential for sales to a private equity buyer, not a competitor,” Malloy said. “The big question is, does it make more sense for a financial buyer to acquire it and then sell it off in pieces?” Those pieces, he indicated, could be more valuable as distinct, well-branded units, rather than the hodgepodge of companies that currently characterize infoGroup. M