SBI Hooks Razorfish In Estimated $8.2 Million Cash Deal

Both companies' boards of directors approved SBI's cash tender offer for all of Razorfish's publicly held shares at a price of $1.70 per share, according to jointly released information. Razorfish stock was trading early Friday at $1.73 per share, with about 4.8 million shares outstanding, according to the most recent quarterly earnings information.

In announcing the news, SBI noted particular interest in Razorfish's skills in building extended enterprise portals. The acquisition adds about 200 Razorfish employees and extends SBI's U.S. footprint with offices in New York, Boston, Los Angeles, San Francisco and Silicon Valley.

Razorfish clients to be acquired as part of the deal include Western Union, Regeneron Pharmaceuticals, Microsoft, Cisco Systems and the Los Angeles Department of Water and Power.

Following the completion of the tender offer, SBI will consummate a second-step merger in which all of the remaining stockholders of Razorfish will receive the same price paid in the tender offer, according to both companies.

Jean-Philippe Maheu, CEO of New York-based Razorfish, said in a released statement that "the time is now to join forces with another leader in the professional services space." Maheu said the decision was made following a successful repositioning of the company in the extended enterprise portal space.

Razorfish, which had 2001 revenue of $104 million, has been working hard to leverage its existing technology investments into specialty enterprise portal development. To survive the market collapse that found the former Wall Street darling trading at about 14 cents per share, compared with a February 2000 high of $56.94, the company closed offices and downsized to 250 employees from about 2,000 at the beginning of 2001.

Ned Stringham, CEO and president of Salt Lake City-based SBI, said in a released statement that the acquisition completes a major phase of the company's long-term growth strategy to build an "industry-focused, business-driven professional services firm."

In late July, SBI acquired once high-flying Web integrators Lante and Scient. Those acquisitions followed a series of other solution provider acquisitions by SBI, which also purchased the assets of WebFlow in May 2002, Emerald Solutions in October 2001 and marchFirst in June 2001.

AMY ROGERS contributed to this story.