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iTurf acquires college Web site OnTap.com
NEW YORK, Aug 10 (Reuters) - Teenager Web site network iTurf Inc.
(Nasdaq:TURF - news) hopes to go away to college this fall by acquiring OnTap.com, a Web site geared toward college students, from MarketSource Corp. in a deal valued at about $19 million.
Under the terms of the transaction, iTurf will issue 1,587,000 shares of its Class A common stock to the selling MarketSource owners and
shareholders in a tax-free exchange, accounting for the transaction as a purchase.
''The Ontap acquisition...enables us to serve our users as they move
from high school through college,'' said iTurf CEO Stephen Kahn. ''We
also anticipate leveraging additional commerce opportunities to this new customer base as well as significantly increasing our advertising
revenue.''
ITurf's Chief Financial Officer Dennis Goldstein said in a telephone
interview that the merger is expected to close in time for back to
school by the end of the month.
''This would not change the expectation for us to be cash flow break
even in late 2001,'' he said.
ITurf, a unit of teenage clothing retailer dELiA*s Inc. (Nasdaq:DLIA -
news), operates dELiAS.com and gURL.com, among others.
The OnTap.com site offers a place to chat about things like keloids
(skin that grows over a body piercing), and features a best answering
machine message database, and information on dating and alternative
medicine, among other things.
Following the closing, Derek White, currently executive vice president
of MarketSource Corp. will become president of OnTap.com, which will
become an iTurf unit. Martin Levine, chairman and chief executive of
MarketSource, will be elected to iTurf's board.
Separately, iTurf agreed to enter into a marketing alliance with
MarketSource to promote the iTurf network of sites through
MarketSource's offline marketing channels, which target over 10 million college students on over 2,200 college campuses nationwide.
MarketSource has agreed to enter into a three-year $6 million
advertising and sponsorship agreement on the iTurf sites.
MarketSource will market iTurf as part of an integrated package
comprising both online and offline media to clients seeking access to
the high school and college markets.
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