After nearly nine months of delay, FindWhat.com signed an amended agreement to acquire European paid listings provider Espotting for about $170 million.
The purchase price is higher than in the original deal struck in June, thanks to FindWhat's soaring stock price. FindWhat closed at $19.44 yesterday and reached a 52-week high of $27.94 in September. FindWhat's stock was priced at under $15 in June.
The new deal is more heavily weighted toward stock, lowering the cash amount from $27 million to $20 million and number of shares from 8.1 million to 7 million. The amount of cash will vary based on Espotting's assets at the closing date.
The deal was put into limbo after FindWhat discovered problems with the British search company's finances that called into question Espotting's claim of profitability. After its audit, FindWhat said Espotting lost $12 million in the year before the merger and $7 million in the last nine months of 2003.
The acquisition greatly expands FindWhat's geographic reach, adding Espotting's paid search deals in six European markets and Japan. Espotting has lost some key distribution deals, including Yahoo Europe and Ask Jeeves UK.
FindWhat announced the amended deal with its fourth-quarter earnings. The company reported net income of $3.5 million on $21 million in sales. FindWhat said the deal should add to earnings within one quarter after closing.
Brian Morrissey covers search marketing for DM News.com. To keep up with the latest search marketing news subscribe to our free e-mail weekly newsletter Search Engine Marketing by visiting www.dmnews.com/cgi-bin/newslettersub.cgi .
