Toronto-based shopper marketing agency Pareto announced today that it could soon be sold after entering into “exclusive discussions” with an affiliate of global private equity firm The Riverside Company.
Pareto said that it expects an offer worth $2.72 per share. Such a sale price would value the company at almost $97 million.
Pareto said it issued today’s release in response to recent trading activity in its common stock.
Reached by phone this morning, Pareto president and CEO Kerry Shapansky said he couldn’t elaborate on the proposed deal. “I’m in a position where I’m really not able to comment very much at this stage,” he told Marketing. “This is not a deal that’s finalized. We were in a position where we were required to issue a press release.”
According to the release, any agreement would involve Pareto’s executive team being retained.
For the three months ended Sept. 30, Pareto recorded profits of $3.9 million on revenues of $25.6 million, up 45% from the corresponding period a year earlier.
Management discussion of the results said that the increase was based on the contribution of Direct Sales Force, a company specializing in intercept and experiential marketing–from sampling and trade show teams, to retail sales promotions–that was acquired by Pareto early last year, as well as “strong” organic growth.
Potential owner Riverside specializes in acquiring what it calls “growing enterprises” worth US$200 million or less, and includes a diverse portfolio of companies across a variety of industries.
In a recent release, it described 2010 as “one of the best years in its history,” highlighted by 24 acquisitions, 11 exits that provided “significant returns” to investors, and continued global expansion that included the opening of its first Australian office. The company also completed the 300th transaction in its 23-year history.
According to corporate literature, Riverside has US$175 million in equity slated to be invested during the first quarter alone.
