LOVELAND — An unspecified number of workers at Constant Contact Inc.’s customer-support center in Loveland are looking for work this week after being laid off a day after the $1.1 billion sale of the online marketing company closed.
About 15 percent of Waltham, Mass.-based Constant Contact’s employees worldwide were laid off last Wednesday, Feb. 10, after official finalization of the sale to Endurance International Group Holdings Inc. (Nasdaq: EIGI), a Burlington, Mass.-based cloud-hosting company.
In an email to BizWest on Tuesday, Endurance chief operating officer Ron LaSalvia said he could give no details about how many jobs were eliminated in Loveland, but a source inside that center said the “Tier 1” basic support staff was not affected.
“We are not providing specifics related to the individual offices,” LaSalvia wrote. “The vast majority of employees are continuing forward in their current roles or new and expanded roles at Endurance. All affected employees were notified last week.
“While it’s too soon to provide details about specific go-forward plans, we’re very excited about the progress we’re making toward integrating Constant Contact with the Endurance family,” he wrote. “We have strategic plans under way that we’re confident will lead us to success down the road.”
Constant Contact employed 1,400 people — including 325 at the facility at 3675 Precision Drive in Loveland — when the acquisition was announced in November. Fifteen percent of the overall figure would indicate that about 210 employees across all its workplaces lost their jobs.
Endurance, which employs more than 2,500 people worldwide, said it was closing Constant Contact’s offices in London, San Francisco and Delray Beach, Fla., as well as one New York office and would concentrate Constant Contact’s operations in Waltham, Loveland and the remaining New York office.
Constant Contact chief executive Gail Goodman is stepping down, and the acquired company’s chief financial officer, Harpreet Grewal, has been named its general manager.
In a statement emailed to the Boston-based website BostInno, LaSalvia said that “from day one, the Constant Contact acquisition has been as much about its people as its products. We need a strong team to continue to innovate and to serve Constant Contact’s 650,000-plus customers. And we’re pleased that we’ve been able to keep the vast majority of Constant Contact’s employees on board, either in their current roles or in new roles at Constant Contact or Endurance.
“Constant Contact is an exceptionally strong business and will play a key role in Endurance’s family of brands. Any time you bring together two strong public companies, there is naturally going to be some overlap in certain functional areas. Reductions in headcount are a reflection of the overlap in our businesses as we strive to deliver great products to our customer base while investing in future growth.”
Endurance, which went public in 2013, is financing the $32-a-share acquisition with debt. Shares of Constant Contact (Nasdaq: CTCT) traded for the last time on Feb. 9, the day of the closing.
The $1.1 billion sale price included about $200 million of cash on the Constant Contact balance sheet. According to a statement from Endurance, it “funded the transaction with the proceeds of $735 million in aggregate principal amount of incremental senior secured term loans under its existing credit agreement and $350 million in aggregate principal amount of senior unsecured notes. … It also obtained a new senior secured $165 million revolving credit facility under its existing credit agreement.
On the day in November when the acquisition was announced, Constant Contact shares had risen more than 22 percent to $31.83, still well below their record high of $43.18 in August, while shares of Endurance fell to $10.80. At the end of trading on its final day, Constant Contact shares closed at $32.01. Shares of Endurance were trading at $8.34 at midafternoon Tuesday.
Endurance said in November that talks with Constant Contact about the acquisition had started in late 2014. In February 2015, the companies announced a partnership that provides Constant Contact’s email marketing tools to Endurance subscribers.
Founded as “Roving Software” in 1995 in an attic in Brookline, Mass., Constant Contact targets small businesses and nonprofits, offering them colorful templates to advertise their products, services and events through emails, as well as social-media integration. It went public in 2007 and opened the Loveland support center, its first outside Waltham, in 2009.
Endurance, which originally was called BizLand, owns brands including BigRock, HostGator, FatCow.com, Bluehost, iPage, Domain.com, A Small Orange, MOJO Marketplace and ResellerClub. The company expects the Constant Contact deal will raise its paid-subscriber base from 3 million to more than 5 million.
Raymond James was financial adviser to Constant Contact in the transaction, while Goldman Sachs, Credit Suisse and Allen & Co advised Endurance. Latham & Watkins LLP acted as legal adviser for Constant Contact, with Cleary Gottlieb Steen & Hamilton LLP fulfilling that role for Endurance.