Interactive Prospect Targeting Holdings has agreed to buy direct mail specialist Postal Preference Service from Royal Mail and the Dutch Post Office in a £4.3 million deal.

AIM-quoted Interactive, UK market leader in online direct marketing, is to pay £675,000 cash and take on £3.65 million of inter-company loans and other debts owed by Postal Preference, which is being acquired from the two national postal groups and two individual shareholders in London and Belgium. Lionel Thain, chief executive officer of Interactive, claims the acquisition 'opens a direct channel to direct marketers to introduce e-mail marketing'.

Interactive, which increased pre-tax profits last year 123 per cent to £1 million on revenues up 37 per cent to £8.4 million, has also raised £3 million in a placing at 115p through broker Canaccord. The funds have been raised 'to increase its institutional shareholder base and replenish cash used for the Postal Preference acquisition'.

Fast-growing Interactive, whose clients include Cahoot, Ocado, Tesco, American Express, British Gas, Kuoni, Famous Grouse and Alliance & Leicester, wants Richmond-based Postal Preference for its database of four million offline and 350,000 online names with their preferences and permissions. This should help Interactive eliminate antagonising consumers with unwanted material and target them appropriately in its drive to increase the penetration of online marketing.

Thus, although Postal Preference lost £200,000 last year on £6.8 million revenues, Thain argues the deal 'will be earnings enhancing from 2006 through using data collection techniques alone'. Postal Preference also has £7 million of tax losses.

Canaccord floated Interactive in December at 68p. The shares now trade at 140p, up 5p this morning, and could go further.