Cactus, an enterprise marketing company, bought the web personalization and e-mail marketing assets of Sitebrand.com, and its past customers, after Sitebrand became insolvent in February.
Cactus has been in discussions with Ascentium about a takeover since September 2010.
Now boasting combined revenues of $65 million, the newly merged company is targeting $100 million in 24 months with those assets as the backbone of growth.
"Opportunity knocked," said Tony Marinelli, Cactus' chief executive and board chair, the new executive vice-chair. He would not disclose how much of the $65 million was Cactus' share.
"We had in our heads we wanted to be more than e-commerce, and it was a natural extension to it."
Ascentium, based in Bellevue, Wash., bills itself as an "experience agency" that does social marketing and brand engagement for a number of large companies including Cisco, Electronic Arts and T-Mobile.
Cactus, which had a high of almost 230 staff in 2008 to deal with a surge of engineering work for Microsoft Corp., has nearly halved its staff since then after consolidating Cactus' engineering and solutions business.
He said Cactus viewed a merger or acquisition as the most expedient way to grow in the digital marketing arena following a period of "challenging" organic growth. Cactus' approximately 150 staff will remain on board, as well as its executive team, and the Gatineau office will stay open.
The new Ascentium will have more than 500 staff, more than $65 million in annual revenue and clients that include Microsoft, Nestle and AT&T.
Since traditional vehicles like advertising are beginning to dry up as "traditional media" decline, social media and direct engagement are growth paths for companies in the future – making Ascentium a good fit, Mr. Marinelli said.
Cactus began in 1995 as an Internet services protocol company and sold modems.
It eventually sold its residential service to Videotron and built up application expertise for e-commerce, investing in radio frequency identification data management technology for retail supply chains, said Jean-Yves Martineau, Cactus' chief technology officer, in a 2008 interview, when Cactus was named one of OBJ's Fastest Growing Companies.
Its e-commerce experience goes back to 1997, when Cactus worked with the Bank of Montreal to develop an electronic marketplace system.
Cactus' clients include Sam's Club, GameStop, Church & Dwight and PowerBar, and partners include Microsoft Corp., Endeavor Commerce and AT&T.
McGladrey Capital Markets, LLC served as the financial adviser for the transaction.
