CMGI Adds To ModusLink Via Acquisition (CMGI)

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CMGI Inc. (NASDAQ: CMGI) has announced an acquisition this morning of a company called Open Channel Solutions, Inc., which is a provider of entitlement and e-business management solutions.

This acquisition was all cash and was listed as a total value of $24.5 million for OCS.  CMGI is paying out a net purchase price of $11 million for a minority interest and the repayment of debt that OCS currently holds.

CMGI said that this will be neutral to 2008 earnings and accretive thereafter.  In its integration of OCS into ModusLink, the company provides solutions that manage entitlements for software licenses, maintenance & support subscriptions, hardware features and rights-managed content.

Interestingly enough, this company was spun-off of Modus Media International back in 2001.  After CMGI acquired Modus Media international in 2004, CMGI took a minority interest in the company and it has been held as an @Ventures investment since. 

If you adjust for its reverse stock split, CMGI shares have seen a trading range over the last 52-weeks of $9.66 to $26.00.

Jon C. Ogg
February 20, 2008