Vesdia Corporation announced it has signed a definitive agreement to acquire the Stockback loyalty program from New York-based Stockback Holdings, Inc. Through the acquisition, which brings together two of the most well-known players in the microinvesting space, the Stockback program will become an operating division of Vesdia and will relocate its operations from New York to Atlanta. Vesdia expects to record a one-time charge in the second quarter of 2004 relating to acquisition expenses. Financial terms of the all-stock transaction were not disclosed.
Launched in June 2000 as the first ever “consumer stock ownership” program, Stockback enables consumers to build their personal savings by earning shopping rebates of up to 25% at any of Stockback’s 75 merchant partners, including Hertz Rent-A-Car, Old Navy, Red Envelope, and more. Through the program Stockback members have traditionally been able to either direct their rebates into mutual funds managed by Merrill Lynch, or receive them in the form of a check that could then be invested at their discretion. According to a recent report by Financial Research Corporation, merchant and credit card rebate programs in the U.S. have the potential to capture more than $21.7 billion annually in eligible shopping transactions, representing an incremental $1.1 billion per year in assets to mutual funds and other investment vehicles.
“We have had a long-standing respect for Stockback as an industry leader and formidable, yet friendly, competitor. The combination of our businesses provides an exceptional platform for growth and enhanced value, to the benefit of individual investors, participating retailers and financial institutions, shareholders and employees,” says Peter Davis, a former Procter & Gamble executive who is Vesdia’s President and Chief Executive Officer. “What’s more, from a purely financial perspective, we believe this move will have a highly positive effect on Vesdia’s earnings per share in 2004,” continued Davis.
“This transaction provides Vesdia with an excellent complement to its existing portfolio of world-class loyalty programs and also provides the shareholders of Stockback Holdings with equity in a fast-growing, well-managed industry leader,” said Eric Peters, Chief Executive Officer of Stockback Holdings. Furthermore, this divestiture of the Stockback loyalty program allows Stockback Holdings to focus more heavily on our other strategic imperatives,” added Peters.
Vesdia’s current integration plan calls for migration of the Stockback program onto its own patent-protected technology platform. The company will increase the current number of participating merchants from 75 to approximately 500, while also increasing the automatic investment options to several of the most popular mutual funds in the industry.
The purchase of Stockback is Vesdia’s second acquisition in the past 16 months and serves to enhance the company’s leadership position in the consumer loyalty arena in terms of both market share and intellectual property. More specifically, the transaction brings a pipeline of several pending patent applications, as well as a fully-issued U.S. Patent. The patent, entitled “Customer Loyalty Investment Program, includes 22 claims on methods and systems related to both investing and consumer loyalty, is expected to benefit Vesdia by creating additional barriers to competitive entry.
About Vesdia Corporation
Vesdia is widely recognized as the global leader in the field of microinvesting technology. Through its network of top-name retailers and name brands, Vesdia’s patent-protected technology enables individual investors to save towards major life events without incurring out-of-pocket expenses. In addition to serving as the “savings engine” behind its own award-winning coalition loyalty programs, BabyMint and NestEggz, the company’s proprietary technology is also licensed by more than a dozen financial institutions, retailers, and credit card issuers in the U.S. and Canada to facilitate customer loyalty. For more information, please visit .
Stockback enables people to build personal savings through their everyday purchasing activities. Members can earn up to a 25% at merchants such as Dell, Barnes & Noble.com, Buy.com, and Brooks Brothers and can invest their cash rewards in the Stockback Fund, a no-load, no fee fund managed by Merrill Lynch. Stockback was co-founded in 1999 by Robert Feidelson, Timothy Parrott and Eric Peters, and is based in New York City. The company received investments from Cap Gemini Ernst & Young, RRE Ventures, TH Lee.Putnam Internet Partners (THLi) and NeoCarta Ventures. For more information, please visit .