The rollups continue.
Fluent, a wholly owned subsidiary of Cogint (formerly IDI), is combining with BlueFocus International, itself the wholly owned subsidiary of a publicly traded Chinese public relations services company, to create a new entity, name TBD.
The deal, announced Thursday, is being shepherded by investment bank Petsky Prunier and will blend performance marketing platform Fluent with some of BlueFocus International’s hodgepodge of indie PR, social and creative agencies, including We Are Social, Vision7 Media, Citizen Relations, Cossette and The Camps Collective.
BlueFocus will own 63% of the combined company.
When Fluent was acquired by Cogint two years ago, the company’s run rate was $140 million on a gross revenue basis. As part of the BlueFocus deal, Fluent was valued at $415 million (excluding $100 million in cash coming from BlueFocus). The blended company is expected to have more than $500 million in annualized revenue in 2018.
IDI, the information services and risk management company that acquired Fluent in 2015 and later changed its name to Cogint, will spin off as a separate public company to be called Red Violet.
Fluent’s former parent was “just at an earlier stage in its maturation,” said Ryan Schulke, CEO and co-founder of Fluent.
“IDI recently launched a product that will take it on a more independent track in terms of building out their business,” he said.
Fluent, on the other hand, wanted to grow and become a one-stop shop for CMOs looking for strategy and execution under the same roof. That was the primary motivation behind the Fluent/BlueFocus hookup, Schulke said.
“We’re focused on becoming a global marketing services organization,” he said. “We see inefficiencies in the market. If you want to execute an initiative, you probably have to sit down with as many as 10 different agencies. What we’re looking to bring to the table is a more cohesive solution set.”
The deal also supports BlueFocus's long-term strategy, said the company's CEO, Holly Zheng.
"The vision has always been to be one of the world’s leading marketing services companies, but to also, hopefully, be something new and not just walking in the footsteps of the old giants," she said. “To do that, you need traditional communications, social, digital media and you need real ROI and measurable marketing programs. CMOs and business leaders need transparency and data and Fluent fits beautifully into that picture.”
Fluent describes itself as a data-driven performance platform that works exclusively in the digital and mobile space. Clients use its products to run targeted acquisition campaigns. BlueFocus International’s business is centered on creative and building brand strategy.
That means there aren’t really any redundancies in the combined offering, said Schulke, noting the prospect of cross-selling products and services.
“This is all about growth mode,” he said. “We’re not looking for cost take-outs and synergies. We’re walking into this deal fully focused on a growth mindset.”
That’s because the opportunity is ripe, he said. Brands want to cut costs and consolidate their spend, and agency holding companies are feeling the pressure. Bringing product, execution, creative and strategy together under a single umbrella is Fluent’s pitch to meet that need.
Fluent, Schulke pointed out, is strictly compensated on the outcomes it delivers.
“It’s a massive, massive ecosystem out there and CMOs are calling for a change at their agencies,” he said. “The largest holding companies are aware that there’s more scrutiny on their model. Providing services and solutions that are ROI-focused is what’s going to win the day."