BabyMint operator buys Stockback reward scheme
The operator of the BabyMint and NestEggz microinvestment reward programmes, Vesdia Corporation, is to acquire the Stockback 'consumer stock ownership' reward programme from its operator, Stockback Holdings Inc., in a deal for which financial terms have not yet been disclosed.
The Stockback programme will become an operating division of Vesdia and will relocate its operations from New York, NY to Atlanta, GA. Consequently, Vesdia expects to record a one-time charge in the second quarter of 2004 relating to acquisition expenses.
Stocks as rewards Launched in June 2000 as a 'consumer stock ownership' programme, Stockback enables consumers to build their personal savings by earning shopping rebates of up to 25% at any of Stockback's 75 merchant partners, among which are brands such as Hertz Rent-A-Car, Old Navy, and Red Envelope. Stockback members have traditionally been able to either direct their rebates into mutual funds managed by Merrill Lynch, or receive them in the form of a cheque that can be invested at their discretion.
"We have had a long-standing respect for Stockback as a formidable yet friendly competitor. The combination of our businesses provides a platform for growth and enhanced value, to the benefit of individual investors, participating retailers and financial institutions, shareholders, and employees," commented Peter Davis, a former Procter & Gamble executive who is now Vesdia's president and CEO.
Platform and card migration Vesdia's current integration plan calls for the migration of the Stockback programme onto its own technology platform. The company will also increase the number of participating merchants from 75 to approximately 500 while also increasing the automatic investment options to several popular mutual funds. The company has also privately issued an RFP (request for proposals) to a selected group of credit card issuers to replace Chase Manhattan Bank, which was the original issuer of the Stockback rebate credit card.
The purchase of Stockback is Vesdia's second acquisition in the past 16 months, adding a collection of pending patent applications, as well as a fully-issued US patent; entitled 'Customer Loyalty Investment programme', the patent includes 22 claims on methods and systems related to both investing and consumer loyalty. It is expected to benefit Vesdia by creating additional barriers to competitive entry.
For additional information: · Visit Vesdia Corporation at http://www.vesdia.com · Visit Stockback at http://www.stockback.com