UPDATE: Cactus Commerce picks up Sitebrand assets

Elizabeth
Elizabeth Howell
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The assets of the bankrupt subsidiary of Sitebrand (TSX-V:SIB) will stay local, with fellow Gatineau firm Cactus Commerce picking them up for an undisclosed price.

(Stock image)

The deal will give Cactus Commerce all of Sitebrand.com's intellectual property for web personalization, as well as e-mail marketing.

"We’ve been aware of their presence and they play in a very similar space to ours," said Wanda Cadigan, a Cactus spokesperson, in an OBJ interview.

"We saw the acquisition as quite strategic to us, actually, in developing our marketing abilitites going forward."

Cactus, an e-commerce firm that offers business-to-business and business-to-consumer products, was one of Ottawa's fastest-growing companies in 2008, posting a revenue increase of 164.9 per cent.

The company was already considering growing through acquisition when the Sitebrand.com opportunity happened to come along, Ms. Cadigan said.

Customers using Sitebrand.com's services will have a fairly seamless transition, with Cactus working to contact all customers individually to work through the details.

"We’ve reached the majority of them at this point; they’ve been very pleased and happy with the news, obviously," Ms. Cadigan said.

"They’ve been waiting for news with what was going to happen with the assets, they are glad to have some confirmation going forward, and they seem to be reassured that Cactus has come on board and is taking over the assets."

A number of Sitebrand employees were made offers in association with the takeover, but Ms. Cadigan did not have exact numbers available yet. Total Cactus employees number about 200, she said.

Sitebrand had 15 local employees in 2010, according to Ottawa Technology Magazine. The firm did not immediately respond to requests for comment.

The news comes just days after the remaining shell company of Sitebrand, in partnership with Quest Capital Management Corp., said it is seeking $1 million in private placement funds to acquire as-yet-undetermined assets for its shareholders.

"The bankruptcy of Sitebrand.com Inc. was unfortunate, but the public company Sitebrand Inc. still continues," said chair John Eckert in an OBJ interview Wednesday.

"It’s a publicly traded company and the arrangement with Quest is an opportunity to restructure it and refinance it so it can go forward and continue to exist."

The wholly-owned subsidiary owes $3 million in secured and unsecured debt, with secured creditors including the Business Development Bank of Canada, for which it owes $510,000, and Cassie Desjardins de Hull for $350,000.

Sitebrand.com entered creditor protection in December after several quarters of large losses and a few misses in terms of fundraising.

It attempted a $400,000 non-brokered private placement in 2010, pulling up short with only $320,000 in proceeds in two tranches.

In fiscal 2009, the company had a loss of $754,208 or four cents a share compared with a loss of $2.32 million or 13 cents a share in 2008.

Sitebrand, founded in 2000, had technology to personalize website marketing in line with a visitor's demographics. Its customers included Roots Canada, Smashbox Cosmetics and BMO Financial.

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