From: Linda (joelinda1@home.com)
Date: Wed Jul 26 2000 - 16:46:20 PDT
Although InfoSpace easily beat analysts' estimates, the Markets
aren't looking too favorably at this acquisition. Infospace's stock
price has dropped 15% since this announcement was made, after
Market close today.
--Linda
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http://www.zdii.com/industry_list.asp?mode=news&doc_id=ZE504997
July 26, 2000 5:27pm
InfoSpace digs deep to acquire
Go2Net in $4 billion stock deal
By Larry Barrett ZDII
InfoSpace easily topped analysts' estimates in its
second quarter Wednesday and announced it will pay a
hefty premium to acquire Internet content aggregator
Go2Net in stock deal valued at more than $4 billion.
InfoSpace (Nasdaq: INSP) said after the bell it will issue
1.82 shares of stock for each outstanding share of
Go2Net (Nasdaq: GNET), valuing Go2Net shares at
$86.91 a share or 43 percent above its closing price of
60 9/16.
By the way, InfoSpace posted a second-quarter loss of
$3.3 million, or 1 cent a share, on sales of $24.6
million.
First Call Corp. consensus expected the provider of
Internet infrastructure services to lose 6 cents a share
in the quarter.
Ahead of the merger announcement and earnings
report, InfoSpace shares closed up 1 7/16 to 47 3/4
while Go2Net shares closed off 1 9/16 to 60 9/16.
"Today marks another historic milestone in the history
of the rapid evolution of InfoSpace," said CEO Arun
Sarin in a prepared release. "InfoSpace turns in another
record quarter of rapid growth and announces the
merging of two powerful entities to create the premier
global company delivering the services that are
fundamentally changing how people around the world
communicate…"
The board of directors of both companies have approved
the deal and expect it to close sometime in the fourth
quarter.
The $24.6 million in sales marks a 252 percent
improvement from the year-ago quarter when InfoSpace
posted a loss of 2 cents a share on sales of $6.98
million.
In the quarter, InfoSpace's wireless sales surged 100
percent from the year-ago quarter. It exited the quarter
with a backlog of more than $98 million for the next four
quarters.
Company officials said the merger will help the
combined companies to accelerate growth opportunities
through product synergies, providing end-to-end
services for companies looking to establish or expand
their existing e-commerce capabilities.
With the addition of Go2Net's merchant base of 1.1
million, InfoSpace now has a combined merchant base
of almost 2 million merchants.
InfoSpace shares moved up to a 52-week high of 138
1/2 in March after falling to a low of 9 3/16 in
September.
The stock split 2-for-1 in April.
All 13 analysts tracking the stock rate it either a "buy"
or "strong buy."
Analysts are expecting it to post a loss of 13 cents a
share in the fiscal year.
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