Updated: ExactTarget co-founder joins Experian cross-channel marketing division following sale

ExactTarget co-founder, Peter McCormick, becomes chairman of Experian's newly divested cross-channel marketing business following majority stake sale to a private equity firm

ExactTarget’s co-founder will step in as the new chairman of Experian’s Marketing Services business following its US$400m sale to a private equity firm.

Experian joined the ranks of organisations offloading its marketing services business last November, a decision that followed a strategic review and desire to narrow the organisation’s focus back onto its core credit services and decision analytics businesses.

Under the sale terms revealed this week, a 75 per cent stake in Experian’s Cross-Channel marketing business, incorporating its Marketing Suite, CheetahMail and Mail Publisher offerings, professional and strategic services, is being acquired by private equity firm, Vector Capital, and former ExactTarget co-founder, Peter McCormick. The deal values the business at US$400 million. Experian will retain a 25 per cent stake in the spin-off business.

The deal sees McCormick appointed the new company’s chairman, working closely with the current president of Experian Marketing Services’ Cross-Channel Marketing business, Matt Seeley. Experian’s CEO, Brian Cassin, also joins the new-look board of directors. The transaction is subject to customary closing conditions and is expected to complete during the first half of the financial year ending 31 March 2018.

The CCM business encompasses 1600 employees working across 18 offices globally. The company claims 55 per cent of its client base are global enterprises.

“When we founded ExactTarget, we created a unique company culture that underpinned our commitment to establishing market leadership and to serving our customers, and we have found that same approach mirrored in the CCM team,” McCormick said in a statement. “We are excited by the opportunity to bring our perspective and expertise to this team, and we are deeply committed to CCM’s customers – the biggest brands in the world – in supporting them in their daily marketing efforts to create winning outcomes for their own brands.”

Seeley said he was excited to be working with McCormick on a new growth plan for the business.

“We believe the marketing Suite product is uniquely positioned to help marketers use their customer data and insights to drive personalised, contextual marketing experiences. We are also eager to work with this exceptional group to create the best company in marketing technology today and long into the future,” he said.

Experian isn’t the first martech company McCormick has turned his hand to since co-founding ExactTarget in 2000 and helping to sell it for US$2.5 billion to Salesforce in 2013. He joined the board of directors of email marketing software vendor, Emma, last August, and has also been an independent director at Booker Software, Clicktale, Smartling and Offerpop. Prior to ExactTarget, McCormick held sales and channel development positions at divine, Inc, Target and Steelcase.

Punt-IT principal analyst, Charles King, described the acquisition news as "interesting", and saw McCormick's involvement as significant.

"First and foremost, CCM must be doing something right if it can inspire McCormick's return to business," he told CMO.

"The size and reach of CCM's organisation means that McCormick and his management team will have a lot to play and work with. Overall, I believe the deal should be positive for CCM and its customers, as well as McCormick and Vector Capital."

IDC analyst, Gerry Murray, also noted the significance of Vector's investment, pointing out the equity firm has been steadily acquiring martech and adtech businesses, including Emarsys (B2C marketing cloud), Sizmek (ad tech) and Meltwater (PR).

"These are all substantial players," Murray said. "Adding the Cross Channel Marketing business from Experian rounds out the B2B side of the portfolio.

"How integrated these solutions become remains to be seen, but it’s a strong portfolio with large established customer bases that could support active cross selling."

Having recently raised US$1.4 billion for its fifth PE fund, which was oversubscribed by $200m, could well mean Vector hasn't finished the acquisition spree just yet, Murray added.

Experian joins a growing list of platform players to recently offload their marketing software businesses, including Teradata (now reflected in marketing operations business, Aprimo, and digital marketing execution business, Mapp) and SDL (now cross-channel marketing vendor, Alterian).

At the time of announcing the intention to sell the cross-channel business, Cassin said email and cross-channel marketing revenues had improved considerably. Across the board, however, Experian’s full-year revenue was down slightly year-on-year to $2.236 billion, while operating profit dropped 8 per cent to $510 million.

“However, we see fewer synergies between email/cross-channel marketing and the rest of the group than for other parts of our business,” he said.

Marketing Services total and organic revenue remained flat in FY16, at 16 per cent of group revenue. The division had been expected to contribute approximately US$290m to group revenue in FY17.

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