The former boss of global marketing firm Harte Hanks has launched a scathing attack on the company after it announced it is using the proceeds of its $112m (£88m) sale of Trillium Software to pay off outstanding debt rather than tackle its estimated $26m (£20m) pension deficit.
Set up in the late Nineties as a division of Harte Hanks Data Technologies, the company first revealed plans to offload the business in July, deeming it “likely to be a better strategic fit and more valuable asset to other parties”.
The company has now agreed to sell the business to Syncsort for $112 million in cash, although it still requires regulatory approval and to meet other conditions.
But former CEO Dean Blythe, who left the company in 2008, said there should be more pressure on Harte-Hanks to take care of the people who helped build the company.
He told San Antonio Business Journal: “We may not be able to get blood out of a stone, but this is about what is right and what is wrong. I am beyond angry.”
While maintaining that some of the proceeds from the sale should be used to fund Harte Hanks’ pension plan, he also claims the company may be living on borrowed time because of greater financial uncertainties. “The sale of Trillium is only delaying the inevitable,” he said.
In October, Blythe filed a class-action lawsuit against the marketing company in state court in Massachusetts over its lack of commitment to use proceeds from the eventual sale of Trillium to fund the pension plan and now plans to press forward with that lawsuit.
In response, Harte Hanks officials said the company plans to use “substantially all of the net proceeds” from the sale of Trillium to pay off its existing debt and put the company in an “improved financial position.” It has refused to comment on the lawsuit.
Harte Hanks chief executive Karen Puckett said: “Our announcement is the result of a comprehensive process to maximise the value of the Trillium Software business in the growing data quality and data governance segment.
“Now Harte Hanks can wholly focus resources on our core strengths and capitalise on our unique combination of marketing strategy, analytics, and execution capabilities. The sale of Trillium Software, along with the cost reduction programme we implemented in 2016, provides Harte Hanks with a stronger balance sheet as we move the company on its path toward revenue stability and historically strong cash flows and improved profitability.”
In the UK, Harte Hanks acquired agency Mason Zimbler in 2008 and two years later bought B2B specialist Information Arts. Both were subsequently rebranded Harte Hanks.
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