Harte Hanks Sells its 3Q Digital Business
03 March 2018 - 8:21AM
Harte Hanks (NYSE:HHS), a leader in developing customer
relationships, experiences and interaction-led marketing, today
announced that it has sold its 3Q Digital subsidiary to an entity
owned by certain former owners of the 3Q Digital business.
Consideration for the sale included a $5 million cash payment to
Harte Hanks, subject to customary working capital adjustments, and
up to an additional $5 million in cash payable to Harte Hanks if
the 3Q Digital business is sold again (provided that certain value
thresholds are met). The $35 million earn-out related to the Harte
Hanks acquisition of 3Q Digital in 2015 was assigned to the Buyer,
therefore relieving the Company of the obligation. Harte Hanks also
expects that it will be due a yet-to-be-quantified tax refund
related to the sale after it files its 2018 US federal income tax
return.
“We explored a number of alternatives, and selling 3Q Digital
back to David Rodnitzky and his senior leadership team was the best
outcome for our stockholders, clients and employees,” said Karen
Puckett, Harte Hanks President and CEO. “I continue to have great
respect for David, his team at 3Q and the work they do. We look
forward to continuing our partnership with 3Q Digital to bring
their services to Harte Hanks clients.”
“We are appreciative of all the support and partnership provided
to us by Harte Hanks over the last three years and plan to continue
to work closely with them to support our current and future
clients,” said David Rodnitzky, 3Q Digital CEO.
Harte Hanks is currently debt free, with cash reserves and has
improved financial flexibility due to continued cost reductions,
the previously announced $9.9 million preferred stock investment
and the increase and extention of the company’s “covenant-lite”
credit facility.
About Harte Hanks:Harte Hanks is a global
marketing services firm specializing in multi-channel marketing
solutions that connect our clients with their customers in powerful
ways. Experts in defining, executing and optimizing the customer
journey, Harte Hanks offers end-to-end marketing services including
consulting, strategic assessment, data, analytics, digital, social,
mobile, print, direct mail and contact center. From visionary
thinking to tactical execution, Harte Hanks delivers smarter
customer interactions for some of the world's leading brands. Harte
Hanks’ 5,000+ employees are located in North America, Asia-Pacific
and Europe. For more information, visit Harte Hanks at
www.hartehanks.com, call 800-456-9748, email us at
pr@hartehanks.com. Follow us on Twitter @hartehanks or Facebook at
https://www.facebook.com/HarteHanks.
As used herein, “Harte Hanks” refers to Harte Hanks, Inc. and/or
its applicable operating subsidiaries, as the context may require.
Harte Hanks’ logo and name are trademarks of Harte Hanks.
Media Contacts: Harte Hanks
Scott Hamilton 303-214-5563 scott.hamilton@hartehanks.com3Q
Digital Hillary Read 603-359-0039
hillary@3qdigital.com
Harte Hanks Cautionary Note Regarding Forward-Looking
Statements:Our press release may contain “forward-looking
statements” within the meaning of U.S. federal securities
laws. All such statements are qualified by this cautionary
note, provided pursuant to the safe harbor provisions of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Statements other than historical facts
are forward-looking and may be identified by words such as “may,”
“will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,”
“seeks,” “could,” “intends,” or words of similar meaning.
These forward-looking statements are based on current information,
expectations and estimates and involve risks, uncertainties,
assumptions and other factors that are difficult to predict and
that could cause actual results to vary materially from what is
expressed in or indicated by the forward-looking statements. In
that event, our business, financial condition, results of
operations or liquidity could be materially adversely affected and
investors in our securities could lose part or all of their
investments. These risks, uncertainties, assumptions and
other factors include: (a) local, national and international
economic and business conditions, including (i) market conditions
that may adversely impact marketing expenditures and (ii) the
impact of economic environments and competitive pressures on the
financial condition, marketing expenditures and activities of our
clients and prospects; (b) the demand for our products and services
by clients and prospective clients, including (i) the willingness
of existing clients to maintain or increase their spending on
products and services that are or remain profitable for us, and
(ii) our ability to predict changes in client needs and
preferences; (c) economic and other business factors that impact
the industry verticals we serve, including competition and
consolidation of current and prospective clients, vendors and
partners in these verticals; (d) our ability to manage and timely
adjust our facilities, capacity, workforce and cost structure to
effectively serve our clients; (e) our ability to improve our
processes and to provide new products and services in a timely and
cost-effective manner though development, license, partnership or
acquisition; (f) our ability to protect our facilities against
security breaches and other interruptions and to protect sensitive
personal information of our clients and their customers; (g) our
ability to respond to increasing concern, regulation and legal
action over consumer privacy issues, including changing
requirements for collection, processing and use of information; (h)
the impact of privacy and other regulations, including restrictions
on unsolicited marketing communications and other consumer
protection laws; (i) fluctuations in fuel prices, paper prices,
postal rates and postal delivery schedules; (j) the number of
shares, if any, that we may repurchase in connection with our
repurchase program; (k) unanticipated developments regarding
litigation or other contingent liabilities; (l) the ability to
integrate and successfully leverage newly-acquired service
offerings as anticipated; (m) our ability to complete anticipated
divestitures and reorganizations; and (n) other factors discussed
from time to time in our filings with the Securities and Exchange
Commission, including under “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2016 and in our
Quarterly Report on Form 10-Q for the three and nine months ended
September 30, 2017. The forward-looking statements in this
press release are made only as of the date hereof and we undertake
no obligation to update publicly any forward-looking statement,
even if new information becomes available or other events occur in
the future.
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