News Focus: Acquisition - DLG builds through Wegener deal

Data provider DLG has shot up the consumer lifestyle league table with its purchase of Wegener DM - the first of several acquisitions the company is pursuing.

DLG chief executive Jeremy Whitaker claimed the company is now the UK's leading lifestyle data provider in terms of quantity of household records, data volume traded and related turnover.

But several leading industry figures at Wegener, including group marketing director Caroline Kimber and technical development director Tony Lamb, left the company after DLG took over. Three of Wegener's commercial directors also departed.

And Wegner's UK chief executive, Otto Oosterwijk, did not remain part of the Lonbdon-based unit under the deal.

DLG bought Wegener's UK operation from its Dutch parent, Koninklijke Wegener, which also sold off its other European direct marketing units.

Whitaker told Direct Response DLG was in the "advanced stages" of negotiations for three other potential acquisitions and would be surprised if one deal were not completed by Christmas.

Since Whitaker led a management buyout of DLG at the end of February, he had made propelling the company to the leading position in the lifestyle sector - ahead of UK data giants Experian and Acxiom - a primary goal.

"We weren't mentioned in the same breath as Experian, Acxiom or perhaps even Wegener. Now we should be," he said.

"This acquisition gives us the scale that we were looking for, and we're now looking to other acquisitions to give us more depth in terms of capability," he added.

Whitaker declined to reveal what DLG paid for Wegener DM UK, but said the company financed the acquisition from its own cash surplus and additional investment from its private equity partner, Promethean Investments.

The management team still owns 30 per cent of DLG while Promethean holds 70 per cent.

While DLG is projecting a profit of £4.5m on revenues of £17m this year, Wegener had not been profitable in the UK. But Whitaker expects to see a turnaround fairly quickly, noting that Wegener's management had done a good job of improving the business.

"We've acquired the company just before the numbers started to reflect that turnaround," Whitaker said. "We will only need to add a little of our own magic to the existing plans."

DLG's strength in lifestyle lies in its telephone and online data, while Wegener provides depth on the print survey side. Both companies run data broking and analytics businesses.

Under the terms of the deal, DLG retained the rights to the name Dudley Jenkins - a previous incarnation of Wegener DM UK - but can only use the Wegener name until end of January 2009.

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