MarketWatch.com, Pinnacor in $103M Merger

Looking to sink its teeth deeper into the content syndication business, San
Francisco-based MarketWatch.com on Wednesday shelled out
$103 million in cash and stock to acquire Pinnacor, Inc.
(formerly ScreamingMedia).

For MarketWatch.com, which already dabbles in the paid content space with
its BigCharts.com subsidiary and other paid subscription newsletters, the
Pinnacor acquisition adds a major player in the content
aggregation/syndication space and a slew of Web-based technology targeting
the financial services, brokerage and media industries.

Under terms of the transaction, a new combined company will be set up
after MarketWatch.com pays $44 million in cash plus 6.5 million shares of
stock at an estimated exchange ratio of 0.2659. The aggregate purchase price
for Pinnacor would be $103.2 million and Pinnacor stockholders will own
approximately 27 percent of the combined company’s equity, the companies
said in a joint statement.

Pinnacor representatives will take two seats on the new company’s board
of directors.

MarketWatch.com said the deal would expand its presence as a provider of
premium-branded news, tools and charting capabilities. Since the early days
(ScreamingMedia) as a content aggregator, Pinnacor has found its niche in
selling technology that encompass market data and investment-analysis tools
for financial services firms.

The company, which was renamed in October when ScreamingMedia acquired
Inlumen for $2.6 million
, also hawks business information, portal
software and messaging services for enterprise clients and wireless
carriers.

With the deal, MarketWatch.com gets hundreds of new customers in the
banking, brokerage, media, and insurance sectors. Those new customers
include Boeing , which inked a deal in
May 2001 to integrate its SiteWare platform into the high-speed Internet
services being offering by the Connexion by Boeing service.

At the time, that deal was described by ScreamingMedia as the largest in
its eight-year history. That pact called for ScreamingMedia to be paid for content
distributed on the Connexion by Boeing service, which provides high-speed
Internet access services to flying passengers.

“This is a terrific combination. We bring together world-class
journalists, designers and engineers as part of a company that already
counts as customers many of the leading financial services and media
companies, MarketWatch.com CEO Larry Kramer raved in a statement. “We are
also able to deliver diversified revenues streams, with significant
contributions from advertising and licensing activities, and a growing
presence in subscription services and wireless technology,” he added.

The merger also signals continued contraction in the content aggregation
space. Before adopting the Pinnacor name, ScreamingMedia was at the heart
of negotiations to acquire iSyndicate. After missing out on the deal, the
company acquired
Stockpoint
in a $21 million transaction to boost its offerings to the
financial services industry. Interestingly, Stockpoint was one of MarketWatch.com’s main competitors.

ScreamingMedia was one of a handful of New York-based technologies to take the IPO
plunge
in 2000, when tech stocks were given the cold shoulder on Wall
Street.

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