Proceed Acquisition Won't Proceed

Think Partnership has decided not to acquire search marketing firm Proceed Interactive, saying Proceed did not fulfill certain conditions of the merger agreement.

One of those conditions would have been the restatement of Proceed’s earnings, in the form of audited financial statements, which Proceed was to deliver to Think Partnership before an August 31 deadline. Merger talks began in December, and the closing date of the pending merger was extended in February to August 31.

The transaction was rumored to be dead as early as March, but neither Think Partnership or Proceed Interactive would confirm at that time. Now, it’s official.

“We are not willing to compromise our acquisition process. Notwithstanding our high regard for the owners of Proceed Interactive, it has become clear that the conditions to the closing of Think Partnership’s proposed merger with Proceed will not be fulfilled, so we have made the decision to move on,” Gerard M. Jacobs, CEO of Think Partnership, said in a statement.

Think Partnership also terminated its month-old merger agreement with offline affinity marketing player Member’s Edge, citing displeasure at the company’s willingness to consider a competing offer in the midst of its exclusive negotiations period.

Think Partnership, formerly CGI Holding Corp., has been on a buying spree for the past year. In January, CGI merged with Raleigh, NC-based full-service ad agency MarketSmart. In March, the company added to its search and affiliate marketing divisions with the acquisition of UK-based SEM firm smart interactive, along with affiliate marketing providers KowaBunga! Marketing and PrimaryAds.

This is not the first setback in the company’s plans. In July, Andy Beal, the highly visible VP of marketing at WebSourced, resigned his position, citing philosophical differences. The company’s affiliate marketing division is also embroiled in a battle to recover its business data from Direct Response Technologies, erstwhile partner to PrimaryAds and now a competitor to Think Partnership’s KowaBunga division.