Harris Interactive Completes Two Acquisitions - Extends Reach
in North American and Asia/Pacific Regions
Acquires Decima Research – a leading Canadian full-service
research firm
Acquires MarketShare of Hong Kong/Singapore as base to attack USD 3.3 billion
Asian market
Noteworthy Points
Decima
- Full-service Canadian research firm - US $26 million revenue – 125
employees
- Will provide access to US $0.6 billion Canadian market – 7th
largest in the world
- Combination will create one of the largest and strongest research companies
in Canada
MarketShare
- Approx. US$2.6 million revenue – 40 employees – with recent 75-80%
growth
- Proven Global Network partner – has worked jointly with Harris for over
three years
- Will provide access into the rapidly-growing US$3.3 billion Asia/Pacific
market, and serve as a platform for continued acquisitive growth in the region
ROCHESTER, N.Y., OTTAWA, HONG KONG and SINGAPORE – August 16, 2007 –
Continuing the expansion of its global research capabilities, Harris
Interactive® (NASDAQ:HPOL) has acquired Decima Research, a leading Canadian
research firm, and MarketShare, a private Asian research firm with co-located
headquarters in Hong Kong and Singapore.
"Adding the strengths of these firms to the Harris Interactive
enterprise will improve our global service offering and provide increased access
into two fast-growing regions that represent about a $4 billion market
opportunity," commented Gregory T. Novak, president and CEO of Harris
Interactive. "We’re doing what we said we would do: grow this Company in
order to remain competitive and serve our clients on a global basis," Novak
continued. ‘"We believe that we’re going about it in the right way, by
acquiring motivated partners who share our vision and by structuring future earn
outs that align with our goals and promote mutual success."
"These acquisitions represent significant progress in extending our
reach into the world’s top research markets. By adding these new operating
units, Harris Interactive now has presence in six of the top ten research
markets, and access to two-thirds of the global research market, up from
approximately one-half just six months ago." stated Kyle Karnes, executive
vice president of corporate development at Harris Interactive. "In line
with our global expansion goals, we will continue to look for attractive
partners in other sizable and high-growth regions around the world."
Decima Research
Named one of Canada’s 50 Best Managed Companies in each of the last
two years, Decima Research is a privately-held, full-service, public
opinion and market research firm headquartered in Ottawa, Ontario, Canada, with
offices in Montreal, Toronto and Vancouver. The firm has particularly strong
practices in financial services, telecommunications, public affairs and
tourism/recreation/gaming research. Decima has approximately 125 full-time
employees, and in FYE January 2007, generated US$26.2 million in revenue, about
20 percent of which was derived from online research. Combining the Harris
Interactive Canadian online panel with Decima’s 140,000 online members will
create one of the largest, best-managed and highest quality online survey panels
in Canada.
"We’re thrilled to join Harris Interactive. This new union will allow
us to utilize the technological muscle and extensive research solutions of
Harris Interactive to better serve our clients," said Bruce Anderson, CEO
of Decima Research. "I believe we will be able to quickly take advantage of
many cross-border and global synergies to propel us to the next level of growth
in the North American marketplace. For our employees, this transaction opens up
great opportunities to do more, learn more and be even more successful."
Harris Interactive paid US$21.3 million in cash up front for the firm, plus
future consideration tied to growth and profitability. The newly combined entity
will be now known as Harris/Decima and join the Harris Interactive North America
group. A complete transition to the Harris Interactive global brand will take
place within the next year.
MarketShare
MarketShare is an Asia-Pacific consulting and market research firm with joint
headquarters in Hong Kong and Singapore. The majority of their research is
conducted in mainland China, Hong Kong, Taiwan, Japan, South Korea, India,
Singapore and Malaysia. For the 12 month period ended June 30, 2007, the firm’s
40 employees generated approximately US$2.6 million in revenue (15%
Internet-based) for about an 80 percent increase over the previous year.
As a member of the Harris Interactive Global Network, MarketShare has been
working jointly with Harris Interactive on major global and regional accounts
since 2004. The Company has proven expertise in the retail, financial services,
technology and travel/tourism sectors.
"The rapid rise and continued growth of consumerism in Asia will force
companies to better understand their customers’ evolving needs and drive
demand for faster and more sophisticated research solutions such as those
available through Harris Interactive," said Ali Mirza, executive director
of MarketShare. "Harris Interactive with its global technology and
experience, coupled with MarketShare’s localized knowledge and presence is a
winning formula to tap these opportunities for rapid growth throughout
Asia," added Anthony Venus, executive director of MarketShare.
Harris Interactive paid US$2.8 million in the all-cash deal for the firm plus
future consideration tied to growth and profitability. MarketShare will become
part of the Harris Interactive Asia group, and the transition to the Harris
Interactive global brand is expected to begin immediately.
"I’m thrilled to welcome these two great organizations into the Harris
Interactive family. Together, I believe that we will realize our vision of
becoming a unified global research firm with the power to fully leverage our
technology, our combined solution sets and the Internet to rapidly grow and
achieve high levels of profitability," concluded Novak.
Stock-based compensation
In connection with the transaction, effective August 16, 2007 Mr. Anderson
will be granted non-qualified stock options to purchase Harris Interactive stock
with a value of CAD$240,000 at an exercise price equal to the fair market value
of the Company’s stock as of the close of trading on August 16, 2007. One
quarter (25%) of such options vest on August 16, 2008, and the remaining balance
vest at a rate of 1/36th per month over the 36 months thereafter. The options
will expire on August 16, 2017 or, if earlier, upon the occurrence of certain
events described in the Option Agreement. Mr. Anderson also will receive shares
of restricted stock with a value of CAD$160,000 on August 16, 2007. If his
employment is terminated, 100% of the shares will be forfeited if before August
15, 2008, 75% if between August 16, 2008 and August 15, 2009, 50% if between
August 16, 2009 and August 15, 2010, and 25% if between August 16, 2010 and
August 15, 2011. All unvested options will immediately vest, and all forfeiture
restrictions on the restricted stock will lapse, upon the occurrence of a change
in control.
Conference call and webcast
The Company has scheduled a conference call to discuss these acquisitions for
Friday, August 17, 2007 at 8:00 a.m. ET. Gregory T. Novak, president and CEO
will host the teleconference. Formal remarks will be followed by a question and
answer session.
To access the conference call, please dial toll-free 866.383.8008 in
the United States and Canada, or 617.597.5341 internationally. The
passcode is 72873911. A live webcast of the conference call will also be
accessible via the investor relations section of the Company's website at www.harrisinteractive.com/ir,
where an archived replay of the webcast will be available for 30 days following
the call.
About Harris Interactive
Harris Interactive is the 13th largest and fastest-growing market research firm
in the world. The company provides innovative research, insights and strategic
advice to help its clients make more confident decisions which lead to
measurable and enduring improvements in performance. Harris Interactive is
widely known for The Harris Poll, one of the longest running, independent
opinion polls and for pioneering online market research methods. The company has
built what it believes to be the world’s largest panel of survey respondents,
the Harris Poll Online. Harris Interactive serves clients worldwide through its
North American, European and Asian offices and through a global network of
independent market research firms. More information about Harris Interactive may
be obtained at www.harrisinteractive.com.
To become a member of the Harris Poll Online and be invited to participate in
online surveys, register at http://www.harrispollonline.com .
About Decima Research
Decima is Canada’s fastest-growing and largest independent public opinion
and marketing research company, offering research-based advice to clients, as
well as large-scale telephone, online and qualitative data collection. Visit us
at www.decima.com
About MarketShare
MarketShare is a full-service market research and consulting firm working
with clients across the world to understand, invest and profit from
opportunities in the emerging markets in Asia-Pacific and Middle East. Our
mission is to help our customers gain profitable market share through
understanding consumer behavior, competition, local regulations and changing
market dynamics. For more information, please go to www.marketshare.com.sg
Contacts:
Dan Hucko
Harris Interactive
+01 585.214.7470
dhucko@harrisinteractive.com
Nancy Wong
Harris Interactive
+01 609-919-2426
nwong@harrisinteractive.com
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