Financial news site TheStreet.com has acquired interactive marketing and mobile agency Kikucall, paidContent has learned from multiple sources. An SEC filing signifies that TheStreet (NSDQ: TSCM) paid out $1.75 million for a business combination transaction, but does not specify Kikucall. Also not clear: if that’s the full amount of the sale. A rep for TheStreet in the company’s legal department (yes, that’s the company’s PR savviness: for a public company its size, it doesn’t have an official PR person, but the investor relations person also handles whatever PR calls it gets) said company had no comment. TheStreet.com owns Promotions.com, which is also involved with digital marketing, so likely Kikucall’s services will be integrated with it.
There is an existing connection between TheStreet.com and Kikucall. According to Kikucall’s company page — which has, coincidentally, been taken down (cached version here) — TheStreet’s CEO Daryl Otte is one of Kikucall’s main investors, along with another TheStreet.com board member, Martin Peretz, publisher of The New Republic.
Otte made his investment as a director with Montefiore Partners; he was named interim CEO of TheStreet in March, when long-time CEO Thomas Clarke stepped down. After a short search to replace Clarke was dropped, Otte was given the position permanently last May. Our sources say any “profits” going to Otte and Peretz are going to charity. From the SEC filing: “The shares are merger consideration paid to shareholders of a target including two directors one of whom is an officer,” which squares up with what we mentioned above. Also, in connection with the acquisition, Otte is being granted about 40K shares of common stock, while Peretz is getting about 205K shares, and for both price per share at time of merger was deemed to be $2.56 per share, according to SEC filings.
Kikucall was founded in 2001 by Brian Hecht, who was involved in the launch of blog hosting site Tripod, before it was acquired by Lycos, and enews, a magazine marketing company which was sold to Barnes & Noble (NYSE: BKS). It started as a mobile marketing firm, and then expanded into online marketing as well over the years.