Yahoo to buy search-software maker Inktomi
SUNNYVALE, Calif., Dec 23 (Reuters) - Internet media company Yahoo Inc. <YHOO.O> on Monday said it would acquire Internet search-software maker Inktomi Corp. <INKT.O> for $235 million, in a move to boost its Web search capabilities.
Yahoo said it would pay $1.65 per share for Inktomi. Based on Inktomi's outstanding shares, that puts the value of the deal at $241.5 million.
Yahoo said the aggregate purchase price was $235 million, adjusted for Inktomi's expected cash balance net of debt as of Dec. 31.
Inktomi shares were up 36 percent on the news at $1.60 on Nasdaq, while Yahoo shares were up 26 cents at $17.32.
The purchase price is above Inktomi's 52-week low of 23 cents on Oct. 1 but far below its high of $7.97 on Jan. 4.
Yahoo's plan to buy money-losing Inktomi comes amid increased competition from popular search engine Google, which recently launched an online shopping site and a news service.
The deal is expected to be completed in the first quarter of 2003. Yahoo said it expects the acquisition to increase its earnings per share within 12 months of closing.
The deal is subject to regulatory approval and the approval of Inktomi stockholders.
Last month, Inktomi sold its enterprise search software business for $25 million in a move it said would allow it to concentrate on the Web search business. That followed a 20 percent reduction in staff in October.
For fiscal 2002, ended in September, Inktomi posted revenue of $112.7 million and a net loss of $41.5 million, or 29 cents a share.
12/23/02 10:23 ET
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