CGI Holding, the Illinois-based parent of WebSourced in Morrisville, is acquiring an online interactive ad agency in a deal worth nearly $4 million.

CGI recently closed on $15 million in a private placement in order to pursue an acquisition strategy.

Tuesday’s deal, which was announced before markets opened, calls for CGI to purchase Proceed Interactive for 666,666 shares of stock. Based on Monday’s closing price of CGI ($5.90, down 15 cents), the purchase price would be $3.9 million.

In a statement, CGI said an additional 666,667 shares of stock would be placed in escrow and issued to Proceed stockholders based on “earn outs” of between $1.2-2.1 million a year.

“This is a merger of strength: we become a truly national company; we extend our expertise in key marketing verticals; and we gain energetic and creative partners with the Proceed founder, executive management and the rest of the Proceed team,” said Gerard Jacbos, CEO of CGI, in a statement. “Merging with Proceed will increase our core business of search engine marketing by 15 percent and will significantly expand our base of client relationships, allowing us to further extend our leadership position in the Internet marketing industry.”

Proceed Interactive, which is also known as Meandaur, has 35 full-time employees and operates offices in Chicago, Dallas and Los Angeles. Senior management agreed to stay in place with multi-year employment contracts, CGI said.

CGI said it expected the deal to produce profits for the merged operations.

Proceed Interactive, which was launched in 1996, is expected to have revenues of $3.6 million in 2004. It manages and places advertising for clients in paid search marketing placements and Internet marketing spending.

The company has more than 50 clients, including General Motors, Wells Fargo and two major hotel chains.

Jonathan and Stephen Schepke, the co-CEOs of Proceed, will remain, and founder Bruce Findley will act as a consultant to them, CGI said.
WebSourced focuses on search engine optimization, pay-per-click campaign management, and online dating.

WebSourced: www.websourced.com