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CMGI acquires AdForce
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September 20, 1999: 4:56 p.m. ET
$500M stock deal adds advertising clout to CMGI's growing family of companies.
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NEW YORK (CNNfn) - Internet investment firm CMGI Inc. continued its recent shopping spree Monday, acquiring fledging online marketer and research company AdForce Inc. for $500 million in stock.
The deal, expected to close before the end of the year, significantly strengthens CMGI's online advertising capabilities while providing the company access to AdForce's extensive digital media delivery and measurement services.
Terms of the agreement call for CMGI (CMGI) to exchange 0.262 share of its common stock for every share of AdForce (ADFC), which just went public in May.
The two companies are hardly strangers. Earlier this year, CMGI subsidiary Engage Technologies Inc. signed an agreement with AdForce to provide customer profile ad-targeting services.
Then, in July, Adsmart, another CMGI subsidiary, hired Cupertino, Calif..-based AdForce to be the primary ad serving provider for its advertising solutions network, which encompasses more than 300 Web sites.
CMGI officials said it expects to make AdForce's technology available to other members of its growing list of online subsidiaries as well.
CMGI's business model centers on building Web properties to take them public. So far it has created or acquired nearly 50 subsidiaries, including its most recent deal to acquire a majority stake in the AltaVista search engine.
The companies gave no indication of what impact Monday's purchase will have on CMGI's earnings, but investors clearly liked the deal. CMGI stock climbed 3-7/16 Monday to close at 83 7/16, while AdForce gained 3/4 to 20-1/4.
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CMGI Inc.
AdForce Inc.
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