News

Ad firms drop deal, part ways

Just weeks after announcing that a planned acquisition had been scrapped, it now appears an ongoing working relationship envisioned by digital advertising firm RBuzz Inc. and ATM Advertising Inc. will not materialize.

January 7, 2002

Just weeks after announcing that a planned acquisition had been scrapped, it now appears an ongoing working relationship envisioned by digital advertising firm RBuzz Inc. and Baltimore-based ATM Advertising Inc. will not materialize.

In a Jan. 8 news release, ATM Advertising president Mike Szimanski said he planned to work with RBuzz on a project basis in the future. But when contacted Jan. 24 by ATMmarketplace.com, Szimanski said there will be no further affiliation between the companies.

"Although RBuzz has what could be a viable business concept, we have elected to pursue other projects," Szimanski said. "We've been in dialogue with them and we've tried to work some things out. But in light of everything, it's not going to be possible."

He said that after the acquisition plans were announced in June 2000, RBuzz failed to finalize the terms.

"RBuzz never brought the deal to closure," said Szimanski, who was to have become vice president of global advertising, sales and communications for RBuzz.

The agreement, Szimanski said, was scheduled to close Sept. 1. When nothing had been finalized by Dec. 1, ATM Advertising withdrew.

"Our feeling is that if RBuzz wouldn't or couldn't close the deal, we wanted to make ourselves available to others who could," Szimanski said.

The acquisition called for RBuzz to purchase ATM Advertising Inc. through a stock/cash deal for an undisclosed amount. Both companies are privately owned and declined to disclose their annual earnings.

RBuzz COO David Stroud said he was surprised by news that the companies would not pursue business opportunities together outside the acquisition deal. Stroud said that Szimanski had offered his consulting services to RBuzz.

"That was his offer to us and we certainly were not adverse to it," Stroud said.

"He is focused on his business and he is a great guy and provides a valuable service. I hope he accomplishes what he wants to accomplish."

A promising match

The pairing of ATM Advertising and RBuzz seemed promising.

RBuzz has an international presence, with offices in Singapore, London, Sydney, Perth, Toronto and Tampa, Fla. The company's goal is to "consolidate the out-of-home advertising media industry and combine existing media networks to create one global advertising and information network," according to its Web site.

In 1999, ATM Advertising had begun an ambitious ATM ad deal to bring a campaign for Compaq Computer Corp. to more than 1,700 ATMs nationally. Both RBuzz and ATM Advertising were committed to bringing advertising not only to ATMs, but kiosks - a new business project for the latter. Additionally, Stroud said, RBuzz was excited about the idea of having its own in-house ad agency.

"Mike brought some valuable insight into the industry and he was clearly a success and well respected in that field," Stroud said. "It was, at the time the discussions started, a nice match. I don't think we would have been hurt had the transaction gone through and likewise, I don't think that anybody's going to be hurt by it not having been completed."

Szimanski expressed mixed feelings about the deal gone bad.

"At the time, the feeling is, it's always good to be part of something bigger," Szimanski said. "You have greater resources, you have a larger geographic spread. RBuzz has a terrific idea, so it was about all of that. It's nice to own your own company, but when you think about being able to maximize your efforts and your stockholders' efforts and your employees, sometimes if you can find the right partner, it's not a bad thing to merge with them."

Stroud understands Szimanski's desire to retain ownership of his company. Remaining independent of RBuzz, Stroud said, adds value to ATM Advertising as a business with its own identity. There is a place, he believes, for both businesses in the ad world.

"I think there probably was a way to save that relationship if people had really been committed to it. Up here in Canada we have a senate which is a second layer of judicial review and they call it sober second thought," Stroud said. "I think it's probably what happened. It came about for some of the wrong reasons, but you stand back and not focus on what you're trying doing day to day and think about where you want to be strategically a month from now, a year from now, or 10 years from now. It's probably going to be a good thing for everybody. I certainly hopes so."