MindArrow Systems Inc. plans to acquire nearly defunct Radical Communication Inc. in a stock deal worth more than $3 million, the company said yesterday.
Under the terms of the agreement, MindArrow would offer 1.98 million shares of its common stock, worth $2 million, and 135,000 shares of its Series C Preferred Stock, worth $278,100. MindArrow, a provider of online marketing software and services, is offering an unsecured subordinated promissory note worth $1 million, which it will pay in two annual installments of $500,000, beginning Oct. 1, 2002.
The deal is expected to close in early fall.
Radical Communication is a privately held provider of rich media e-mail services based in Marina Del Rey, CA. Its flagship product, RadicalMail, allows marketers to create and distribute e-mail with streaming audio and video. The company drastically curtailed its operations in June and has been operating since then with about a dozen people, down from 51.
Last month Jay Stevens, Radical Communication's director of marketing, said the company was talking with a number of possible suitors and that he hoped to be able to announce a deal by early July.
Aliso Viejo, CA-based MindArrow said the Radical Communication acquisition would allow it to expand its product offerings and give it the opportunity to market complementary services. It also expects to be able to attract new customers seeking to use rich media in their e-mail marketing.
Radical Communication sees its acquisition by MindArrow as a means of extending its capabilities to other areas of marketing.
“Combining the technologies and practices of two leading direct digital communications companies will speed development and delivery of a comprehensive software suite,” said Bruce Stein, chairman/CEO of Radical Communication. “The new platform would extend our capabilities beyond e-mail marketing into a more comprehensive communication solution.”
