TN Technologies Holding, the name of the company formed in the merger, said it wants to raise a maximum of $30 million with shares offered by itself and its individual shareholders. By comparison, rival Poppe Tyson wants to raise a maximum of $50 million in a pending public offering.
Holding company True North Communications paid $29 million of its stock to the partners of Modem Media for 49% of the shares in that company.
That transaction effectively valued the new company at about $59 million. Then the new company issued additional stock valued at about $16 million to True North in exchange for its various interactive holdings, including Northern Lights Interactive, Cf2GS and R/GA Interactive.
TN Technologies Holding is based in Westport, Conn., home of Modem; it has 275 employees and offices in nine cities, including three outside the U.S.: London, Hong Kong and Toronto.
Chairman-CEO Greg Blaine, a director and officer of True North, is based in Chicago, while G.M. O'Connell, president-chief operating officer and co-founder of Modem, is based in Westport.
Mr. O'Connell and one of the other Modem co-founders, Douglas Ahlers, each own 1.33 million shares of stock in the new company, or about 17.5% each of current outstanding shares. True North owns about 61% of outstanding shares.
The prospectus contained few surprises. Pro forma revenue of the combined companies was $16 million in the first half of 1996, up 60% from the same period a year earlier and 40% from the second half of '95. Nearly three-quarters of that came from interactive assignments.
Assuming 40% growth again in the second half of this year, the company will end '96 with $38.4 million in revenue. That's enough to make TN Technologies the nation's biggest interactive marketing company.
AT&T*43% OF REVENUES
The new company had a pro forma net loss of $1.57 million in the first half of '96.
AT&T accounted for 43% of first-half revenue. By itself, Modem-AT&T's interactive agency of record-generated 84% of its revenue from the telecommunications giant during that period.
Three core competencies-strategic marketing, technology development and digital design and production-represent the planks in TN's growth strategy, according to the prospectus.
The company has granted employment contracts to five top managers.
Mr. Blaine will receive a base salary of $250,000 per year and is eligible for increases and a 30% bonus. Mr. O'Connell will receive a base salary of $300,000.