Emmis Communications Corp. said Monday that it acquired a controlling interest in Indianapolis-based pricing software firm Digonex Technologies Inc. in a deal worth about $5 million.
Locally based Emmis said it paid $3 million for a 51-percent equity share of Digonex, which will allow it to appoint a majority of the company's board of directors. Emmis said it will make an additional investment of $2 million in the company within a few months, increasing its stake to 66 percent.
Digonex's "dynamic pricing" software compiles sales data for clients and adjusts prices up or down to maximize profit. Its clients include the Indianapolis Zoo, the Anaheim Ducks, Lids Sports Group and the University of Washington.
The software firm, founded by Jan Eglen in 2000, has 17 employees. Emmis said there are no immediate plans to reduce or add to Digonex employee base.
Eglen, 71, will change his title from CEO to founder/executive vice president and chief scientist as part of the deal. Emmis said he will retain an active role in the company.
Greg Loewen, Emmis' chief strategy officer and president of Emmis Publishing, will become president and CEO of Digonex while retaining his current titles.
Digonex recently worked with Emmis on the pricing for one of its radio station's summer concerts.
Emmis CEO Jeff Smulyan said the two firms will help each other.
"We are certain that dynamic pricing is the future of all inventory management," Smulyan said. "As a company that sells hundreds of millions of dollars in advertising units, we believe that this acquisition will help us find the optimal price for our entire inventory and increase revenue opportunities. We also believe that our operational skills, including our expertise in sales, marketing and finance, will help the Digonex team become a leader in this space."
The Indianapolis Zoo consulted with Digonex before recently changing to a variable pricing strategy.
Emmis owns 19 FM and 4 AM radio stations in major U.S. markets, including WIBC-FM 93.1, WLHK-FM “The Hank” 97.1 and WYXB-FM 105.7.