The two companies expect substantial synergies as they combine their businesses and seek additional acquisitions. MerchantCircle runs an online network that allows local merchants to advertise and attract customers. Reply manages an online market place that lets consumers find local companies.
Together the companies will have more than 25 million unique monthly visitors and a membership of more than 2 million local merchants, according to a press release. It expects revenue of more than $100 million next year, the release says. Both companies are profitable.
The purchase, announced last week, will allow the combined company to consider an IPO next year, says MerchantCircle founder Ben Smith IV, who will become president of Reply’s media division.
MerchantCircle, of Mountain View, Calif., is backed by Scale Venture Partners, Rustic Canyon Partners, Steamboat Ventures and IAC.
Reply, of San Ramon, Calif., is backed by Scale, Saints Ventures, Outlook Venture, Hercules Technology Growth Capital and ATEL Ventures, according to Thomson Reuters, publisher of this blog. It has raised $32.87 million, says Thomson Reuters.