Monday, August 28, 2006

Vocus Inc. this month completed a $28 million deal to acquire online press-release service PRWeb to expand the Lanham software company’s position in the public relations industry.

Vocus’ 220 employees make software for reporters, analysts and public officials to monitor press reports and manage e-mail campaigns.

The company paid $20.8 million in cash and 494,543 shares of its stock, as well as assumed liabilities, to acquire PRWeb, whose online service posts press releases on the Internet.

The PRWeb deal is the biggest acquisition for Vocus since the company was founded in 1992. The acquisition will allow Vocus’ customers to distribute their press releases on PRWeb, Vocus-managed media lists and Vocus online newsrooms.

“Early on, Vocus realized the potential of the Internet to change the way people used business applications,” said Bill Wagner, Vocus’ chief marketing officer.

Customers access Vocus software over the Internet with a secure log-in and password, but do not need to download any programs to their computers.

Public relations personnel typically use the software to monitor press coverage, analyze the effectiveness of their outreach efforts and send e-mail messages to large audiences.

“Now that these customers are in the Vocus franchise, we plan on offering them other products and services to help them manage their public relations activities,” Mr. Wagner said.

Until it took over PRWeb, Vocus was developing its own press-release news wire that it planned to call VocusWire. Now the company is discontinuing plans for VocusWire.

With PRWeb’s technology and distribution network, “Vocus’ market opportunity has expanded noticeably,” said Brad Whitt, research analyst for financial firm RBC Capital Markets.

PRWeb delivers press releases through about 20,000 online feeds, most of them small to medium-sized businesses. It distributes about 600 press releases a day.

Mr. Whitt said Vocus received “an attractive purchase price” in a deal that would add to the value of its stock and create opportunities for business development. He also predicted Vocus’ revenue and earnings would increase 25 percent over the next few years, but only if the company can overcome obstacles such as “prolonged weakness in [information technology] spending, a slowdown in the economy” and “competitive pricing pressure.”

Its stock, which trades under the symbol VOCS on the Nasdaq Stock Market, closed yesterday at $13.48 per share, up 8 cents from Friday’s close.

The company reported net income of $714,000 (4 cents per diluted share) on revenue of $9.2 million in its second quarter ended June 30, compared with a loss of $233,000 (2 cents) on revenue of $6.8 million a year earlier.

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