David Rodnitzky, founder and chief executive officer at 3Q Digital, announced Friday that the agency has separated from marketing parent Harte Hanks. The company is once again a private digital agency.
3Q went up for sale in the second quarter of 2017 after Harte Hanks announced during an earnings call in April that it would trim $10 million in annual costs -- partly by putting its digital subsidiary 3Q Digital up for sale nearly two years after buying it for $30.2 million in cash from Rodnitzky, who founded the company in 2008.
Rodnitzky was excited to take the company private again. He believes 3Q Digital is a top digital agency, "so from that perspective it was a pretty easy decision to make an offer to buy ourselves back” for an undisclosed amount.
Harte Hanks acquired 3Q Digital in 2015, hoping to capitalize on the agency's reputation and expertise in search. During the past three years 3Q has more than doubled its staff and revenue, opened new offices, including the first international locations, and introduced new services such as conversion-rate optimization and native advertising teams.
When Rodnitzky sold the company to Harte Hanks, the team was given autonomy to run the business, which meant control over hiring, choosing the clients, and services to offer.
“We think there is still a ton of disruption coming to marketing, and 3Q is at the forefront of leading that disruption," Rodnitzky said. “Traditional agencies are struggling to remain relevant while digital agencies like 3Q are struggling to keep up with demand. So expect us to just become bigger and better.”
The sale included a $5 million cash payment to Harte Hanks, subject to customary working capital adjustments and up to an additional $5 million in cash payable to Harte Hanks if the 3Q Digital business is sold again, provided that certain value thresholds are met.
Hart Hanks reported that the $35 million earn-out related to the original acquisition of 3Q Digital in 2015 was assigned to the “Buyer," relieving the company of further obligations.