|
NetZero, Juno to merge
|
 |
June 7, 2001: 7:45 p.m. ET
Companies to form United Online, No. 2 ISP in the United States
|
NEW YORK (CNNfn) - Internet service providers Netzero Inc. and Juno Online Services Inc. are merging in a $70 million all-stock deal to form the second-largest ISP in the United States.
The companies said Thursday they will form a new company, United Online Inc., in which NetZero (NZRO: Research, Estimates) stockholders will have a majority 61.5 percent stake.
United Online will be second to AOL Time Warner's (AOL: Research, Estimates) America Online in terms of subscribers, with more than 7 million. AOL Time Warner is the parent company of CNNfn.
NetZero shareholders will receive 0.2 share of the new company, while Juno shareholders will get 0.375 share. The transaction has the implied effect of Juno stockholders getting 1.785 shares of NetZero for each share of Juno (JWEB: Research, Estimates).
United Online plans to trade on the Nasdaq as "UNTD," with the deal scheduled to be completed by the end of the 2001.
Based on Netzero's Thursday closing price of 95 cents per share, the total deal is valued at $70.3 million.
NetZero to remain free
Both companies currently offer free Internet access, with Juno also offering higher-level billable services. Upon completion of the merger United Online will market free services under the NetZero brand and a billable service under the Juno name.
The companies had combined fourth-quarter revenues of $41.5 million.
NetZero Chairman and CEO Mark R. Goldston will become chairman, president and CEO of United Online, and NetZero CFO Charles S. Hilliard will retain his position in the combined company.
The companies expect restructuring costs of between $20 million and $25 million.
"We expect the merger of our two companies to generate significant synergies that will result in increased financial strength, numerous operating efficiencies and an improved user experience," Goldston said.
Shares of NetZero rose 2 cents to 97 cents after hours, while Juno was unchanged at $1.48. 
|
|
|
|
|
|
NetZero
Juno
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
