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DoubleClick takes stake
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January 13, 2000: 9:02 a.m. ET
Invests $85M in Net advertiser ValueClick in exchange for equity
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NEW YORK (CNNfn) - Internet advertising firm DoubleClick Inc. is investing $85 million in fellow Web advertiser ValueClick Inc. in exchange for a 30 percent equity stake, the companies announced Thursday.
Terms of the deal call for ValueClick to receive $75 million in DoubleClick (DCLK) stock and $10 million in cash. In addition, DoubleClick will get a warrant to buy another 15 percent of ValueClick within 15 months and will also take two seats on ValueClick's Board of Directors.
The cash infusion is expected to further Carpinteria, Calif.-based ValueClick's expansion efforts, including acquisitions and further development of advertising solutions. The companies said the funding won't change ValueClick's plans for additional financing or other sources of capitalization.
New York-based DoubleClick employs a performance based advertising network that uses a cost-per-click model. Currently ValueClick uses an in-house program that served 1.3 billion ads in December 1999. The company now plans to collaborate with DoubleClick to integrate technology platform with DoubleClick's full-service ad server.
ValueClick now serves more than 11,000 sites in its network and serves ads that reach 25 percent of U.S. Internet users, according to Internet traffic measurement firm Media Metrix.
There was no word on how Thursday's announcement will affect ValueClick's initial public offering, which was filed in October, 1999. The company plans to issue 5 million shares in the $9-$11 per share range to raise $57.5 million and expected to trade under the symbol VCLK on Nasdaq.
The pricing date for the stock expires Jan. 31. Lead underwriters are Volpe Brown Whelan & Co., William Blair & Co., and Prudential Securities.
Analysts at AG Edwards on Monday raised DoubleClick's 12-month price target to $320 and upgraded its rating to "accumulate" from "maintain." But on Wednesday, the stock closed down 8-13/16, or 7.5 percent, at 108-3/16. 
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