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Autobytel Acquiring Autoweb

Irvine, Calif.-based Autobytel will acquire its bitter rival, Santa Clara, Calif.-based auto sales site Autoweb.com Inc. in a tax-free merger deal valued at about $15 million in stock.

The combined company is projected to have revenues of more than $100 million per year, Autobytel said, with more than 7,000 dealer customers, 24 international automotive manufacturer customers and over two million unique visitors per month.

Autoweb stockholders will receive 0.3553 shares of Autobytel common stock for each share of Autoweb common stock.

The deal values Autoweb at about 53 cents a share. It closed Tuesday at 29 cents a share and had been facing delisting by Nasdaq. Autobytel's closing price Tuesday was $1.49. Its stock was down 14 cents shortly before the close on Wednesday, to $1.35.

"We believe this combination provides strategic and financial benefits to both groups of shareholders," said Mark Lorimer, Autobytel's president and CEO.

Lorimer said in a conference call that the merged company will be called Autobytel Inc. and added that he expects the company to be operating profitably by the third quarter of 2001.

"We expect significant revenue synergies to develop next year," he said. Neither company has been profitable to date.

Autoweb CEO Jeffrey Schwartz will join the new Autobytel as vice chairman.

"It's no secret that for six years our two companies have been involved in hand-to-hand combat. (but) we believe the combined company will become the industry standard for dealers, consumers and manufacturers," Schwartz said.

Under the merged company, Boston-based AIC (Automotive Information Center), a division of Autoweb, will continue to provide the industry with content, data and technology.

"Merging the AIC capabilities with those of Autobytel is expected to save data and content licensing costs and add a key element to our future business strategy, an important part of which is predicated on providing data, content, technology, and information services to automotive marketers on a global basis," said Lorimer.

Autoweb certainly had been on the ropes; just last week it completed a marketing restructuring plan and said it would take a one-time cash settlement charge of $13 million in its first quarter. Since going public in 1998, Autoweb has never made any money. The company lost $1.35 a share all of last year on revenues of $52 million. Autobytel last year saw its revenues rise 65 percent to $66.5 million. Net loss rose 24 percent to $29 million.