FlashNet Fuses with Prodigy
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The stock-for-stock merger is Prodigy's third acquisition since going public in February 1999. Prodigy (PRGY) will issue 0.35 shares of its common stock for each share of FlashNet common stock -- approximately 4,990,000 Prodigy shares.
The merger expands Prodigy's 1.2 million subscriber base with 244,000 FlashNet customers. When the entire client base is merged, Prodigy said its online community will total more than 1.5 million members.
Samer Salameh, Prodigy chairman and chief executive officer, said the FlashNet acquisition was an attractive deal that further strengthens Prodigy's position in the Internet service provider marketplace.
As a part of the deal, FlashNet supplements Prodigy's national network with an additional 182 local points of presence (POPs), as well as its Texas-based operations and call center. Prodigy plans to utilize FlashNet's independent referral marketing program as a sales channel for both service providers.
Scott Leslie, FlashNet (FLAS) chief executive officer, said the becoming part of the Prodigy family of online services leveraged strengths of both companies.
"The efficiency of FlashNet's operations and the strength of our sales channels combined with Prodigy's brand leadership and strategic positioning is an extremely powerful alliance," Leslie said.
FlashNet was as an ISP startup in 1995, providing Internet access in Dallas and Fort Worth, Texas. Currently, FlashNet offers online services in 450 cities nationwide.
According to Prodigy, shareholder approval of the merger is not required. FlashNet shareholder approval is required and the deal to close early next year, subject to customary conditions and regulatory approval.