In a deal that would create the largest online loyalty marketer, MyPoints.com Inc. on Monday
acquired rival Cybergold
stock exchange valued worth $157 million.
MyPoints.com (MYPT) agreed to pay 0.4800 share of its stock for every
share of Cybergold (CGLD), a transaction that values Cybergold’s stock at
$7.20 a share, a premium over the company’s Friday closing price of $6 a
share. After the transaction, which is expected to close in the third
quarter of 2000, Cybergold shareholders will own approximately 26.5 percent
of the combined company.
The chairman and chief executive officer of Cybergold, Nat Goldhaber, will
join MyPoints.com as vice chairman and board member. He’ll help manage the
development of future products. Cybergold will also be able to nominate an
additional board member, giving it two seats on a nine-member board.
The deal creates a company that may be better able to go the distance
against competitor Netcentives
Inc. (NCNT), which recently got a boost when CMGI (CMGI) took an equity stake in the company and chose to
implement its solution across its portfolio of companies. MyPoints.com is
also touting the deal as accelerating its path to profitability.
“The acquisition of Cybergold establishes MyPoints.com as the clear leader
in the Internet loyalty marketing arena,” said Steve Markowitz, chairman
and chief executive officer of MyPoints.com.
“It provides us with another powerful brand, leading-edge technology and a
unique cash incentive around which to expand our rewarded media business.”
The marriage of the two companies is especially appropriate because they
share very few major clients. Among the top 25 advertisers at each company,
only five are shared.
Together, the companies boast 15.4 million members. MyPoints.com recently
said it surpassed 7 million members, so the acquisition of Cybergold
effectively doubles its member base. Presumably, the companies have not yet
determined the extent of membership overlap.