Two Twin Cities employee-engagement companies are merging to form $350M firm

Two local companies that are the engine behind many large employee-engagement programs are merging.

St. Paul-based Augeo on Thursday said it has acquired Motiv­Action in Plymouth. Terms were not disclosed. Augeo CEO David Kristal said the merged company will have about 300 employees and $350 million in annual revenue.

The acquisition comes at a time when companies are looking more at customer and employee engagement as a means to improve their businesses.

"It's a very unique time in enterprise engagement," Kristal said. "Both Augeo and MotivAction coincidently share a similar view in terms of engagement and have been building our organizations over the last several years to focus on the broader corporate ecosystem."

The merger comes as companies are looking more broadly at their missions. The Business Round­table, an influential group of CEOs from some of the company's largest companies, announced last month a shift in philosophy, saying companies should move beyond a sole focus on shareholders and to consider employees, suppliers and customers as well.

"This whole focus on enterprise engagement and what the Business Roundtable announced, while entirely coincidental to our transaction with MotivAction, couldn't have been better timing," said Kristal, a member of the Star Tribune's board of directors.

Augeo, founded in 2000, creates engagement and loyalty programs for both customers and employees. Motiv­Action, which was founded in 1976, helps companies with employee-recognition events, sales-incentive programs and other company meetings and events that drive employee engagement.

Kristal said MotivAction had been looking off and on for a buyer for some time before both sides met late last year.

"At the end of the day we determined it was a perfect match for us, regarding employees, customers, technology and our cultural fit," MotivAction President and Chief Operating Officer Joe Keller said. "We couldn't have found a better partner."

Employee engagement has been an industry that has been growing and evolving over the last 10 to 20 years. It also is becoming more competitive.

Doug Claffey, founder and chief strategy officer of Energage — an employee engagement, polling and consulting company that surveys thousands of companies annually with partners, including the Star Tribune, through its Top Workplaces program — has been studying employee engagement at U.S. companies for the last 13 years.

"The level of investment in the space, particularly in the technology side of the space, is tremendous," Claffey said. "But the opportunity and the investment and the number of companies providing technology solutions has really been increasing dramatically in the last four or five years."

"Our two companies together will provide the most comprehensive enterprise engagement product in the market," Keller added.

MotivAction employees will continue to work out of the company's main office in Plymouth and 10 other offices across the U.S.