DoubleClick to Buy MessageMedia for $41MDoubleClick Inc. said Friday that it will acquire permission-based e-mail services provider MessageMedia Inc. for $41 million in stock.
Under the agreement, DoubleClick will issue 0.0436 of a share of its common stock for every share of MessageMedia stock. Based on the 10-day average closing price of DoubleClick's stock May 31, the exchange ratio represents a per-share price of 60 cents. The transaction is expected to close in the third quarter.
In early trading Friday, DoubleClick's shares were down 10 cents to $12.95 from the previous day's close. MessageMedia's stock was trading up 11 cents at 54 cents.
Court Cunningham, DoubleClick's vice president and general manager of DARTmail technology, said the acquisition of MessageMedia gives DoubleClick a complete e-mail solution.
"We now have a complete suite of technology that is unique," he said. "The acquisition is in keeping with our strategy of organic growth supplemented by acquisition."
The addition of MessageMedia gives DoubleClick the ability to send more than 700 million e-mail messages a month. MessageMedia delivers more than 100 million messages a month for 310 marketers. DoubleClick delivers more than 600 million messages a month for more than 240 clients.
Cunningham also said the acquisition strengthens DoubleClick's presence in Europe.
DoubleClick will be able to provide clients with a full range of services, including full-service and self-service outsourced e-mail, software, consulting and list hygiene services, as well as sweepstakes services.
He noted that DoubleClick plans to integrate MessageMedia with its DARTmail and FloNetwork technologies.
The acquisition comes as MessageMedia's cost-cutting initiatives seem to be paying off. MessageMedia said in April that it reduced its net loss for the first quarter of 2001 to $13.5 million, or 22 cents per share, from a loss of $18.9 million, or 34 cents per share, in the year-ago quarter.
The company attributed its performance to cost-reduction initiatives begun in December. Part of that reduction has entailed eliminating 21 percent of its work force. On April 17, the company announced a headcount reduction of about 75 people. The cuts are expected to save the company about $1 million.
MessageMedia also said revenue for the first quarter rose to $8.7 million from $6.9 million a year earlier. Messaging revenue grew to $6 million, from $4.3 million in the same quarter in 2000. Software revenue declined slightly in the first quarter to $2.6 million, from $2.62 million in the year-ago period.