Ybrant Digital to buy US online ad firm  ( July '21,2008, Economic Times)

Ybrant Digital, a Hyderabad-based digital marketing solutions firm, is mounting a bid to acquire ‘Spam King’ Scott Richter’s Media Breakaway for about $100 million, sources said.

The US target is an industry leader in performance-based online advertising and direct marketing, but has hogged limelight for its million-dollar legal battles with Microsoft and MySpace in the recent past. This bid for a significant player in the US online-advertising market is the biggest inorganic growth move by Ybrant, which has sewed several smaller overseas acquisitions, to emerge as an integrated digital media marketing solutions provider.

It is believed that Ybrant is seeking PE support to effect the acquisition. PE sources said Ybrant may go in for a staggered buyout, which would see it taking a majority 51% stake initially. Ybrant is raising about $30 million through private placement of equity for the proposed acquisition. Ybrant’s valuation is pegged at around $150-180 million.

Media Breakaway, once acknowledged as the world’s leading spammer, is credited with sending out 100-million emails on a single day. In 2005, Mr Richter’s name was deleted from the Registry of Known Spam Operations (ROKSO) list after Spamhaus confirmed that his company did not receive any complaints for more than a year.

It boosted the fortunes of the Nevada-based company, which at the height of its legal battle with Microsoft and New York Attorney General had filed for bankruptcy. Last month, the company settled another suit with MySpace, which alleged that Richter’s firm gained access to members’ account for sending spam messages.

When contacted, Ybrant chairman & CEO Suresh Reddy said: “We are evaluating the possibility of acquiring a company in the US. We are in discussions with a few firms there and the deal size will be about $100 million. However, we are yet to finalise our acquisition target.”