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SBI & Co underwent a bewildering series of restructurings between foundation in 1997 and its eventual acquisition by competitor Enterpulse. The business was primarily a information technology consultancy which designed and maintained software-based corporate business processes. For a little over three years between 2001 and 2004 it dabbled heavily in the web design and marketing industry, after rescuing the assets of failed rivals such as Scient, Razorfish and MarchFirst. Then there was a change of strategy in 2004 and the group sold off most of its interactive design business to refocus on IT consultancy under the name SBI.Enteris. It was itself acquired by Enterpulse in 2006. Two years later Enterpulse was in turn acquired by competitor Idhasoft.
Management consultant Ned Stringham founded SBI & Co in Salt Lake City in 1997 as an IT consultancy backed by investment from Cerberus Capital Management and GE Capital. As the internet economy boomed, SBI expanded successfully, growing revenues to $60m by 2000. But the company was effectively ignored by the pundits. Not only was it based in dull Salt Lake City instead of sexy New York or San Francisco, but Stringham insisted on maintaining modest and unglamorous profits instead of his competitors' headline-grabbing cash burns. He also avoided all temptations to sell shares to returns-hungry private and institutional investors.
A year later the benefits of that strategy began to appear. When MarchFirst collapsed in 2001, SBI acquired several of its offices (including key creative bases in New York and San Francisco) at bargain prices, as well as around 400 skilled staff and around 200 client relationships. Shortly afterwards, the company acquired another agency, Emerald Solutions, out of bankruptcy, followed in 2002 by Scient.
Once one of America's biggest dotcom agencies, Scient was another high profile victim of the internet boom and bust cycle of 2000 and 2001. Former management consultant Eric Greenberg launched his first internet business in 1996 under then name Viant, then jumped ship after a year to found Scient in 1997. (Two years later he quit Scient as well to start up a third business, 12 Entrepreneuring). At around the same time, rival entrepreneur Bert Ellis was building his own web design business under the name of iXL Holdings. That group expanded rapidly over the next three years, acquiring and absorbing almost 40 different companies involved in internet services in the US and Europe. Scient and iXL both flourished in the early years of the internet boom, becoming fierce rivals. Both followed other agencies down the IPO trail in 1999, but ended up at the forefront of the subsequent slowdown in the market. The two companies restructured, shedding jobs and offices, and finally sought protection in each other's arms in 2001, combining under the Scient name.
Despite the much reduced market, Scient was still one of the top digital agencies, with seven US offices as well as an outpost in London and an affiliate agency in Tokyo. However life remained tough. Scient/iXL's combined revenues in 2001 were $112m, less than a third of the previous year. Net loss was $164m. In April 2002, with its working capital resources rapidly dwindling, the company announced it was seeking "strategic alternatives". Three months later Scient was forced to reverse its previous stock splits to prevent its share price falling below $1, the level at which it would have been delisted by NASDAQ. The business applied for bankruptcy protection in August, and was acquired by SBI shortly afterwards. SBI acquired another failed dotcom agency, Lante, at the same time for around $42m, and then perhaps the most famous interactive agency of all, Razorfish (for a rock-bottom $8.2m). Stringham indicated that further large acquisitions would be unlikely. Instead, he said, the group would concentrate on integrating its current operations.
By late 2003, SBI consisted of three divisions: interactive developer SBI.Razorfish, which housed the best parts of its acquired interactive design businesses; IT consultancy SBI.Enteris; and "business process optimization" software designer Optura. Combined sales were estimated at around $150m. The group announced a change of strategy towards the end of that year. SBI's London outpost, formerly the office of Scient UK, was sold to Swedish developer Framfab (which itself was subsequently acquired by LBi). Then in June 2004 the entire SBI.Razorfish division was acquired by rival group aQuantive for $160m in cash and shares. Optura was sold in March 2005 to Open Text Corporation.
SBI.Enteris carried on as a more specialised designer of business process systems, until it was acquired in April 2006 by Enterpulse, which offered a similar range of services ranging from business processes to content management and corporate portal creation. Stringham left and is now executive director of another IT services company, New Media Gateway. SBI.Enteris CEO Jim Serafin became chief operating officer of Enterpulse, but later left the group.
Last full revision 10th April 2016
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