Consumer reviews provider Viewpoints is poised to acquire PowerReviews from Bazaarevoice after a court agreed with the Department of Justice that Bazarrevoice’s acquisition of PowerReviews two years earlier was anticompetitive.
Bazaarvoice and Viewpoints said they entered into a non-binding letter of intent whereby Viewpoints would acquire substantially all of the assets associated with Bazaarvoice’s acquisition of PowerReviews. Terms of the proposed agreement were not disclosed and the deal requires approval from the U.S. District Court for the Northern District of California. However, when Bazaarvoice’s acquisition of PowerReviews was first announced in May 2012 the largely all stock deal was valued at $168 million. The acquisition was announced three months after Bazaarvoice had completed a successful initial public offering of nearly 11 million shares priced at $12 a share, which netted the company proceeds of $116 million.
The Department of Justice disputed the combination on anticompetitive grounds and by January of 2013 Bazaarvoice was faced with the onerous task of defending the merits of the deal against the federal government. One year later, the court in the Northern District of California sided with the Department of Justice in a ruling that was a major blow for Austin-based Bazaarvoice. The company founded in 2005 had yet to generate an annual profit by the end of its most recent fiscal year and through the nine month period ended Jan. 31, 2014 had posted a loss of $39.5 million on revenues of $138 million.
"Since the district court issued its ruling in favor of the Department of Justice, we have been engaged in a thoughtful process to identify and reach agreement with an appropriate entity to which we could divest the PowerReviews business consistent with the court's decision and views expressed by the DOJ," said Gene Austin, CEO and president of Bazaarvoice. "Viewpoints is an established, committed ratings and reviews provider with experience serving both the consumer and business markets. After a thorough assessment, we believe this divestiture proposal achieves the best possible outcome for our clients, shareholders and employees."
According to Viewpoints founder and CEO Matt Moog, the PowerReviews technology platform provides a world-class, scalable and easy-to-manage platform to hundreds of leading brands and retailers.
“The opportunity to add the PowerReviews platform alongside our recently-launched Viewpoints Pulse service will extend our ability to serve the enterprise market, which promises to create significant additional value for brands and their end customers as we scale our ability to collect reviews of their products and services,” Moog said.