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.
“In a single transaction, Prodigy acquires a talented pool of dedicated
employees and significantly bolsters our infrastructure, customer service
operations and acquisition channels,” Salameh said.
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
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.