American Greetings Corp. on Monday announced it will acquire the remaining 80 percent of Egreetings Network, Inc. that it doesn’t already own and will take a charge of about $33 million on its initial investment.
American Greetings of Cleveland, Ohio, acquired the original 20 percent as part of its Gibson Greetings purchase in March 2000 — one month prior to the collapse of the B2C marketplace. The charge is a clear indication that the price was agreed upon when dot-coms valuations were still relatively lofty.
Egreetings will now be rolled into the company’s AmericanGreetings.com operating subsidiary, positioning the Internet division of American Greetings to better compete with the likes of BlueMountain.com, which is part of the ExciteAtHome.com.
“The acquisition of Egreetings by AmericanGreetings.com will place AmericanGreetings.com among the top 15 websites, with 20 million unique monthly visitors,” said Josef Mandelbaum, Chief Executive Officer of AmericanGreetings.com.
Under the terms of latest agreement, AmericanGreetings.com will extend an all-cash tender offer for all outstanding common shares of Egreetings for 85 cents a share. The deal is valued at about $28.6 million. Shares of Egreeting “We are pleased with the opportunity to leverage the synergies between our sites,” said Andrew Moley, Chief Executive Officer and President of Egreetings. “Combining the two companies’ traffic, content and entertainment relationships will result in a stronger and more appealing site for all of our users.” jumped 25 percent prior to the announcement, which came after the close of trading.
