With StarCite Deal, Active Network Deepens Focus on Business Events

[Updated 1/5/12 8:05 am. See below.] San Diego’s Active Network (NYSE: ACTV) made roughly 50 acquisitions since it was founded (in 1998), but the company has become more deliberate about its deals since it paused in 2010 to overhaul its Software as a Service technology and prepare for last year’s IPO.

The Active Network provides Web-based event registration and related services, and most of its acquisitions have helped the company expand its business beyond online registration for recreational sporting events to include outdoor activities, online communities, and corporate business events. As CEO Dave Alberga told me in August, the company is now targeting a $10 billion market that wasn’t really apparent before the rise of Software as a Service.

Today the company is announcing its latest deal—the acquisition of StarCite, a Philadelphia, PA-based provider of Web-based meetings management, meetings procurement, and online event registration management. It reflects a more concerted focus by the Active Network on the multi-billion dollar business conference and events industry.

[Updates financial terms] In a regulatory filing this morning, the Active Network values the deal at $57.7 million in cash and stock, including $6.6 million in outstanding debt. StarCite has 300 employees and maintains offices in San Jose, CA, London, Dusseldorf, Shanghai, and Hong Kong to serve its target market of global 2,000-size companies. The privately held company was founded in 1999, and has received at least $15 million in venture funding from the ICG Group (NASDAQ: ICGE), TPG Ventures, and Norwest Venture Partners (NVP).

One intriguing aspect about the deal is that it follows a strategic partnership with the Professional Convention Management Association (PCMA) that the Active Network disclosed a few days before Christmas. As part of this new alliance, the Active Network says it’s providing its fully integrated Software as a Service technology for the PCMA’s biggest conference, which begins Sunday at the San Diego Convention Center.

The Active Network says the StarCite deal is part of a reorganization that deepens and extends its corporate event business by combining its existing operation with StarCite’s focus on helping big companies organize and manage a variety of internal meetings and events. What the company calls its new Business Solutions division combines the Active Network’s expertise in helping big companies like Cisco Systems hold conferences with thousands of attendees with StarCite’s capabilities in helping businesses organize smaller meetings, expos, CIO breakfasts, and even online webinars.

One irony: Even though the Active Network and StarCite work in the same market and even sometimes for the same customer, “We really never ran across each other,” says JR Sherman, the Active Network’s newly appointed senior vice president and general manager of business solutions.

JR Sherman

Apart from StarCite’s global presence and capabilities in “strategic meetings management,” Sherman says a big factor in the buyout was the global supplier network of more than 90,000 hotels, destination resorts, conference centers, caterers, and other providers that StarCite has amassed over the years. StarCite also operates a Web-based “supplier marketplace” that enables its corporate customers to connect with its supplier network, as well as an event expense management system to help its customers maintain their spending discipline while throwing a big party.

“Our objective was to tie all these events together,” Sherman says. The Active Network can now provide a broader spectrum of Web-based services for its corporate customers—from huge user conferences to staff retreats. It also enables the Active Network to expand the use of StarCite’s global supplier network for other types of events, enabling the Active Network, for example, to offer discounts on local hotel accommodations to runners who are registering online for a marathon.

In a statement released today, Sherman says, “Through this strategic acquisition, we’ll be in a position to better serve our customers by offering them one of the industry’s most robust, fully scalable technology platforms and a broad range of solutions to successfully run events and meetings of all sizes, any level of complexity, and across all segments.”

As Sherman tells me, providing a range of Web-based services also should be able to tap into the small-to-medium business market.

[Corrects customer stats] ]For the time being, though, the company seems to be focused on big business. As the Active Network says in its statement today, with this acquisition, its new Business Solutions division now “10 of the top 15 financial services organizations, 10 of the top 15 technology corporations and 9 of the top 15 pharmaceutical companies.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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