A harsh focus on Vocus

Contact:  Brenon Daly

Investors erased more than one-third of the market value of Vocus on Wednesday after the on-demand PR management software provider announced the largest deal in its history. Vocus said Tuesday evening that it will hand over $179m in cash and stock for iContact, a transaction that will add email capabilities to Vocus’ marketing suite. The purchase of iContact, which effectively cleans out the treasury at Vocus, is more than three times larger than all of the company’s previous acquisitions combined.

One way to look at the deal: Vocus effectively paid twice for the transaction. In addition to the $179m in consideration it will hand over to iContact’s backers, Vocus also gave up another $170m on the Nasdaq. The stock, which has ranged from the low teens to the low 30s over the past year, changed hands at about $14 on Wednesday.