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
The deal values Autoweb
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.
