MyPoints.com Acquires Cybergold for $157 Million
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MyPoints.com (MYPT) agreed to pay 0.4800 share of its stock for every share of Cybergold (CGLD), a transaction that values Cybergold's stock at $7.20 a share, a premium over the company's Friday closing price of $6 a share. After the transaction, which is expected to close in the third quarter of 2000, Cybergold shareholders will own approximately 26.5 percent of the combined company.
The chairman and chief executive officer of Cybergold, Nat Goldhaber, will join MyPoints.com as vice chairman and board member. He'll help manage the development of future products. Cybergold will also be able to nominate an additional board member, giving it two seats on a nine-member board.
The deal creates a company that may be better able to go the distance against competitor Netcentives Inc. (NCNT), which recently got a boost when CMGI (CMGI) took an equity stake in the company and chose to implement its solution across its portfolio of companies. MyPoints.com is also touting the deal as accelerating its path to profitability.
"It provides us with another powerful brand, leading-edge technology and a unique cash incentive around which to expand our rewarded media business."
The marriage of the two companies is especially appropriate because they share very few major clients. Among the top 25 advertisers at each company, only five are shared.
Together, the companies boast 15.4 million members. MyPoints.com recently said it surpassed 7 million members, so the acquisition of Cybergold effectively doubles its member base. Presumably, the companies have not yet determined the extent of membership overlap.