Alloy Acquires CCS
Mega online marketing company buys skateboarding’s flagship mail-order business.
Alloy Online, Inc. (alloy.com), a leading Web-centric direct marketer providing community, content, commerce and entertainment to the 70-million members of Generation Y, recently announced it has acquired CCS, Inc. (ccsmailorder.com), one of the nation’s leading direct marketers focused on Generation Y boys.
Under the terms of the agreement, Alloy has issued approximately 3.3-million shares of stock and repaid ten-million dollars in assumed debt to complete the acquisition from CCS owner Kubic Marketing.
Through a convergence marketing model that features the CCS print catalog and Web site, CCS reaches over one million teenagers each month. CCS sells a complete line of skate and snowboard clothing, shoes, and hardgoods.
Kubic bought CCS last year when it was formed as the holding company for Dwindle Distribution, World Industries, Merge, Inc., and the El Segundo Hat Company. Kubic partner Frank Messman says the company originally acquired CCS without knowing exactly how it might be partnered with the other Kubic companies. “We acquired CCS because we recognized how much value there was in it,” he says, adding that Kubic immediately began receiving offers from several suitors for CCS. When the partners recognized that CCS’ association with Kubic’s other brands might be perceived as a conflict of interest, they decided to sell. “Alloy seems the most synergetic and most real of them all,” says Messman.
Alloy’s previous success resulted from its expertise in young-women’s fashion e-tailing, so the acquisition of CCS gives the company a powerful tool with which to market to the rest of Generation Y, namely young men.
“CCS is hands-down the premier direct marketer to Generation Y boys,” says Matt Diamond, Alloy’s cofounder and CEO. “The effective multi-channel distribution model that CCS uses to capture this market is highly complementary with Alloy’s strategy and should add significantly to our financial performance and future profitability. We plan to leverage the CCS conduit to Generation Y boys to drive both merchandise and sponsorship revenues. This deal represents an important step as we continue to evolve into the dominant Generation Y-focused marketing company.”
CCS CEO Mike Adamski will stay on to manage the company. “We are excited to bring together CCS and Alloy, two of the leaders in direct marketing to Generation Y,” he says. “We look forward to combining our respective strengths and sharing our resources to better serve our Generation Y customers and realize the economic opportunities in our powerful direct marketing franchise.”
“Over the past twelve months we have implemented a number of important strategic initiatives ranging from our partnerships with blue-chip marketers such as Procter & Gamble, Eastman Kodak, and Johnson & Johnson, to our strategic investment from Liberty Digital to the acquisitions of 17th Street Productions, Celebrity Sightings, and now CCS,” says Diamond. “Each of these efforts not only demonstrate our ability to attract and partner with leading companies, but also provides us with opportunities to build our corporate value going forward.”
Alloy Online, Inc. is a leading Web-centric direct marketer providing community, content, commerce and entertainment to Generation Y, one of the fastest growing segments of the Internet population. Alloy’s convergent media model¿which is centered around its Web site (www.alloy.com), and is complemented by the Alloy e-zine and catalog¿has a total reach of more than ten-million individuals per month.