CFIUS Rejects cogint / BlueFocus Merger

US data intelligence specialist cogint has announced that the Committee on Foreign Investment in the United States (CFIUS) is 'unwilling' to approve its planned merger with Hong Kong-based marcoms firm BlueFocus - and the deal is therefore off.

First revealed in September, the merger would have seen the two firms combine assets - cogint's people-based insights platform Fluent, and BlueFocus' Canadian marcoms company Vision7 and its UK-based social media agency We Are Social - to form a new global marketing services organization. In addition, cogint had planned to spin off its data and analytics operations and assets into a separate company called Red Violet.

In a statement, cogint said that as a result of the political climate regarding Chinese-based acquirers of US companies, CFIUS has indicated its unwillingness to approve the transaction, and therefore, the parties have terminated the business combination agreement. Despite this, cogint will continue with the spin-off of Red Violet, which on completion, expects to have approximately $20m in cash and no debt. Post spin-off, the company expects Fluent to be profitable from day one.

Derek Dubner (pictured), CEO of cogint, comments: 'Undeterred by this decision stemming from the political climate surrounding China-based acquirers, we are committed to continuing to create shareholder value and proceeding with the spin-off of our data and analytics business, Red Violet, into an independent publicly-traded company. Additionally, our digital marketing business, Fluent, which we believe today is more valuable than the $415m valuation assigned by the BlueFocus transaction, will be 100% owned by our shareholders, as a standalone public company, as opposed to 37% owned as originally contemplated by the BlueFocus transaction. We are of the firm belief that the sum of the parts is worth greater than the valuation assigned to our company by today's market'.

Web site: www.cogint.com .