InfoSpace.com To Acquire Saraide, Prio
Separate Stock Deals Total About $740 Million
Get Quote, Company Info: INSP
By Martin Wolk
Reuters
SEATTLE (Dec. 6) - InfoSpace.com Inc., a high-flying Internet infrastructure company, Monday said it will acquire a wireless services provider and an e-commerce company in separate stock deals worth more than $750 million.
The company's acquisition of Saraide, based in San Mateo, Calif., will give it relationships with more than 20 wireless carriers around the world and instantly make wireless services its biggest business segment, accounting for about 40 percent of total revenues next year, according to Naveen Jain, chief executive of InfoSpace.
InfoSpace also is buying Prio Inc., a Mountain View, Calif., company with a platform tying together financial institutions and online and traditional merchants.
InfoSpace stock, which has been surging since last week, rose 17-5/8 to close at a record $149 on Nasdaq, giving it a gain of 43 percent in just three sessions.
InfoSpace will issue about 2.4 million shares of common stock to acquire Saraide and nearly 2.7 million shares to buy Prio in the two deals, which are expected to close in the first quarter of 2000.
Hatim Tyabji, founder and CEO of Saraide, will become president of InfoSpace's wireless services division, while Ashok Narasimhan, Prio's CEO, will become president of InfoSpace's merchant services.
Arif Janjua, a former Saraide executive, has joined InfoSpace as president of its consumer services division.
Peggy Ledvina, analyst for Dain Rauscher Wessels, said the developments were positive for InfoSpace, which has emerged as a leader in providing ''private label'' content and services to some of the Web's most popular destinations.
She said the acquisitions would hurt the company's ability to turn a profit in the near term but boost its overall growth prospects.
''They're signing really long-term, large dollar contracts, so for the foreseeable future, their business is going to continue to grow pretty significantly,'' she said.
Before the deals were announced, prominent Merrill Lynch analyst Henry Blodget said he had initiated coverage of the company with an ''accumulate'' rating and a 12- to 18-month price target of $160 per share. He said the company's fundamentals were good, but he expressed concern about its high valuation. |
