Advertisement

Archive for Thursday, April 8, 1999

WESTERN RESOURCES BUYS STAKE IN DIRECT MARKETER

April 8, 1999

Advertisement

Western Resources Inc. said Wednesday it acquired a 40 percent stake in a national direct marketing company it hopes can speed Western's growth and add to its bottom line.

The Topeka-based utility and home protection company said it paid $31.2 million for its interest in Paradigm Direct, which Western Resources expected would immediately boost its financial results.

Based in Fort Lee, N.J., Paradigm helps clients acquire new customers through direct mail, telemarketing, direct response television and the Internet. It has annual sales of more than $70 million.

Western Resources said that over the past three years it had attempted to increase its national customer base. This year, it expects to have access to more than 6 million customers nationwide through its electric utility operations, its 85 percent ownership of monitored security provider Protection One, and its investment in national gas distribution company Oneok Inc. Those customers will be targeted by Paradigm marketing for its existing clients.

For Western Resources, Paradigm's first focus will be to roll out a new marketing plan for Protection One.

"The investment in Paradigm Direct will provide Western Resources with a proven capability to accelerate the growth of its consumer services business at a lower cost than we could deliver internally, as well as increasing revenues through allowing Paradigm to market branded products such as cellular and long distance to our entire customer base," said David Wittig, Western Resources chairman, president and chief executive.

"We also have the opportunity to earn an additional return on this investment through our ownership position," Wittig added.

The investment is in the form of a cash pay convertible preferred instrument. Western Resources said it will receive part of Paradigm's pretax earnings.

-- Richard Brack's phone message number is 832-7194. His e-mail address is rbrack@ljworld.com.

Commenting has been disabled for this item.