Tuesday, January 31, 2012

Illume being bought by competitor Options Media

By Rodney Brown

Illume Software Inc. is being acquired by Options Media Group Holdings Inc., a publicly traded Florida company that makes a software product similar to Illume’s iZUP to prevent distracted driving.

No financial details of the purchase were disclosed n the release about the sale, but both boards have approved the deal to have Options Media buy 100 percent of Illume stock. Following the sale, which is contingent on Options Media getting funding for both the acquisition and ongoing operations, Illume CEO Daniel Ross will become CEO of Options Media. Shareholders of Needham-based Illume will end up owning 40 percent of the company, post-sale, and Illume will become a wholly owned subsidiary of Options Media.

A filing with the U.S. Securities and Exchange Commission did not reveal any value to the sale, but did state that it was a stock swap deal that involved options and warrants to purchase shares down the road. Based on the 40 percent ownership stake, the deal would be valued at $3.4 million.

In addition to Ross, also taking over management positions from Illume will be vice president of sales Daniel Maier and vice president of engineering Oren Kagan, Ross said in a phone interview.

“I really am pleased it’s a great group to join and the management team here will be driving the bus,” he said. “The world headquarters of Options Media Group will be in Needham.”

Illume’s iZUP will be focused more on enterprise customers as a way to keep fleet drivers from talking or texting on their cell phones while their vehicle is in motion. Options Media markets a similar product called PhoneGuard through its subsidiary PhoneGuard Inc., which will be targeted more toward the consumer market than iZUP.

“The concept behind the merger is to build a stronger offering,” Ross said. “They are stronger in the consumer side and they have this marketing deal with Justin Bieber.” Ross would not speculate on whether or not Bieber would also be used to market the iZUP product to enterprise customers.

“The more obvious merits of Justin Bieber in the consumer and retail space are very clear and we will see what the best representation for fleet and enterprise customers will be,” he said.

Illume announced its move into the enterprise market in September 2011, with the launch of iZUP Enterprise, a development platform and a group of supporting products, such as administrative and reporting tools.

In March 2011, Illume took in $2.37 million of a planned $3 million round of new funding, led by the Massachusetts Technology Development Corp.