Consolidation continues: may development included in deal for DMI, ALC gets MKTG.

Another day, another list company gets acquired. Consolidation of list management and brokerages continued last month, with the purchase of former king of the hill Direct Media International (DMI) by the new behemoth InfoUSA and ALC acquiring the list management division of MKTG Services.

These follow the acquisition by InfoUSA of Walter Karl, Edith Roman, Rubin Response, Millard, Mokrynski-direct, American Church Lists and Jami. InfoUSA, a public company based in Papillion, Neb., is traded on the NASDAQ. In late January, the stock was at $8.84 per share, down from its 52-week high of $12.30. Its 52-week low was $8.05 per share.

DMI, based in Greenwich, Conn., was purchased for $18 million in cash, according to insiders. Larry May, DMI's chief executive officer, declined to discuss the deal's financial terms.

May explained that InfoUSA had made overtures during the past several years. When other firms made inquires regarding merging with or buying DMI, the management team decided to start listening to offers. He declined to identify the other potential suitors other than to say that there were "four or five." But insiders said that one of the serious bidders was Abacus Direct in Broomfield, Colo.

In an exclusive talk with The NonProfit Times, May explained that DMI was an employee-owned business.

Some of the senior executives and staff had been with the company for decades and are in their 60s. "Part of it was aging," he said of the decision to sell.

Another key to the deal, he said, was autonomy. May said while some back-office operations will be merged, the firm will be operated independently. DMI's senior management will remain in place. May said he signed a five-year deal. Dave Florence who founded the firm in 1969, has agreed to stay on for several years, as has Rick Sarli, the chief operating officer, May said.

The senior management of May Development Services, the agency he founded that works with charities and fundraising, will also remain in place, he said.

This is the second time DMI was purchased. In 1996, it was purchased by Acxiom for $25 million, according to reports filed with the Securities and Exchange Commission. A few years later, DMI was bought back for a fraction of the sale price.

DMI manages more than 30 charity lists and has brokered more than 350 million names for charities, May said.

Meanwhile, Princeton. N.J.-based ALC grab bed the list management business of MKTG in Newton, Pa. MKTG's compiling business had previously been jettisoned.

"We're all very excited about this acquisition," said ALC Chairman and CEO Donn Rappaport. The MKTG portfolio includes more than 80 list management accounts.

"We're equally excited about the MKTG staff that will be joining our team," added Lori Magill-Cook, ALC executive vice president, who will oversee the business. That staff includes Kerry Fischette, a 13-year MKTG veteran, and Billie Risser.

ALC had 53 nonprofit data management clients. The MKTG acquisition brought over an additional 17, according to Magill-Cook.

The consolidation is having an impact, according to Martin Stein, chairman of RMI Direct in Danbury, Conn., who equated the state of some list companies to restaurants that have different names but the same ownership and menus. "You can't tell where you are eating. It's all the same thing," he said.

Stein said the firms that remain independent offer choice to nonprofit clients. The consolidation "limits what's available from those companies," he added.

"The clients and members are the ones most hurt by this," he said. "You should answer to clients, not shareholders," said Stein. NPT