Company’s $35M acquisition comes as it cuts workforce by 14%

Shortly after announcing it was cutting 14% of its workforce Monday, March 6, Clearwater-based Digital Media Solutions said it had agreed to purchase another technology company for $35 million.

The digital advertising company notified shareholders that day that it had agreed to buy HomeQuote.io from Customer Direct Group, along with the supporting media and technology assets of the ClickDealer international ad network.

The announcement of the sale came after Digital Media Solutions' board announced it was backing out of a deal to sell itself and that it had begun the restructuring that led to major job cuts.

According to an annual report released March 2022, the company employed “nearly” 580 people at the end of 2021. It has yet to release an annual report for 2022.

DMS, in September, announced that it had received an offer by the private investment firm Prism Data to buy the company for $2.50 per share. The sale would have taken DMS private. Prism is “affiliated” with DMS co-founders Joseph Marinucci, the current CEO, and Fernando Borghese, the current COO, according to the statement.

In the March 6 tale of dueling statements to investors, directors say it was agreed that staying an “independent, public company is in the best interest of the company and its stockholders at this time.”

At the time, DMS also announced that a restructuring is needed “to create efficiency, save costs and strategically target areas with growth potential.” It did not share what the restructuring would look like.

Digital Media Solutions shares, traded on the NYSE under the symbol DMS, opened at $1.06 on March 6 before falling to $0.80 cents at 9:56 a.m. and then jumping back to $0.99 cents at noon. It closed that day at $0.86 cents. By March 10, the stock had closed at $0.70 

As for the purchase, HomeQuote.io is a marketplace website where consumers can be connected with contractors to get quotes on roofing, windows and doors, bathrooms, kitchens, siding and gutters.

DMS says buying the company could add $70 million to $80 million in revenue during the 2023 fiscal year.

“Once completed,” the company says in the statement, the purchase “will allow DMS to continue the expansion of its marketplace solutions into home services in the U.S. market, while also strengthening its brand direct business through international expansion.”

DMS, according to its website is a “provider of technology-enabled digital performance advertising solutions connecting consumers and advertisers.”

It was founded in 2012 by Marinucci, Borghese, Luis Ruelas, Matt Goodman and David Shteif. In November, the company reported $90.1 million in revenue, a 16% decrease from the previous year.