TNS in $75m deal to buy web analytics firm Compete
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UK-- TNS has agreed to buy US digital intelligence specialist Compete in a deal worth $75m up front – with further payments of up to $75m to come if the company hits revenue performance targets.
Boston-based Compete uses a panel of two million people to analyse clickstream data in the US. The information recorded is used to produce data on consumers' online research and buying behaviour.
Clients are informed of, for example, how many times a consumer has looked at a product or service on their website and then purchased a similar item from a rival. The impact of advertising and marketing campaigns can also be measured.
The company, which was formed in 2000 and is owned by a consortium of private venture capital companies, reported year-end revenue of $14.9m for 2007, a 50% rise on the previous year, but investment in panel building led to an overall loss of $4.5m.
David Lowden, chief executive of TNS, said: “Compete's strength lies in its ability to provide competitive analysis of individuals' online behaviour. TNS will enhance this by putting it together with the understanding of consumer attitudes and behaviour that we gain from access panels.”
Lowden also said that in the future,the company would use some of its specialist panels to integrate purchasing and viewing data with internet search and shopping data provided by Compete. This could lead to the development of new syndicated and custom products, which Lowden claimed would be “unique in our industry”.
On the reasons behind the acquisition, Lowden said: "Understanding how a consumer behaves on the internet is something that we must be able to provide our clients. To build that ourselves would, frankly, take too long. We need to have that capacity now, our clients are asking for it now."
Lowden also said that the company might make further acquisitions during 2008 alongside organic growth of existing products and services.
• TNS has reported a 38% rise in operating profit for 2007 in its end-of-year figures. The 2007 figure jumped from £74.4m to £102.7m while profit before tax rose 40% from £59m to £83.2m.
Revenue growth was recorded in Asia Pacific, Latin America, Middle East and Africa (ALM), Europe and North America, with increased activity in China, Korea, Germany, Spain, Hong Kong and Australia. Total revenue was £1,067.7m, a 6% rise from £1,004m in 2006.
Levels of new business activity during the first two months of 2008 are improved on the previous year, and David Lowden said the group was expecting "another good year... both in revenue terms and also in terms of profit growth".
Author: James Verrinder
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