Proceed to Merge with CGI

Proceed Interactive has agreed to merge with CGI Holding Corporation, which owns online marketing firm WebSourced.

Proceed, previously called Meandaur, managed $5 million worth of paid search and other marketing spending in 2004. Projected revenues for 2004 are $3.6 million. The company’s 35 employees manage a roster of accounts including General Motors, Omni Hotels and Wells Fargo. Jonathan and Stephen Schepke, Proceed’s co-CEOs, will continue to lead the company. Founder Bruce Findley will stay on as a consultant.

“We expect this merger to enhance the quality and variety of services we can offer to our clients, and to provide a breadth of opportunities for our shareholders and employees,” said Steve Schepke.

News of the merger follows last week’s acquisition of search engine marketing firm iProspect by Aegis Group. Some industry watchers anticipate a trend of SEM agency buy-outs.

The stock deal is worth a total of approximately 1.3 million shares, half of which will be placed into escrow and paid out according to Proceed’s performance over the next four years. CGI said the merger would be “immediately accretive” to its earnings.

CGI’s WebSourced subsidiary is a purveyor of search marketing services. Clients include RealNetworks, Alaska Airlines and Lowe’s.