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FindWhat.com deal to acquire Espotting finalised
The price is right (finally)

By Reuters

Published: Tuesday 10 February 2004

Internet marketing company FindWhat.com said on Monday it signed a long-delayed deal to acquire UK search service Espotting Media in a transaction expected to add to earnings within one quarter of its closing.

But FindWhat shares fell slightly in after-hours trade, as analysts said the company's outlook for the full year was being taken as cautious by investors.

The Fort Myers, Florida-based company said shareholders of privately held Espotting will get 7 million shares of FindWhat stock and about $20m in cash. It said it would also issue options and warrants for an additional 800,000 shares of its stock to Espotting employees and affiliates.

FindWhat said the total deal values Espotting at about $170m based on last Friday's closing stock prices. It is expected to close in the third quarter.

The merger of the two companies was first announced last June. In September and then again in December, the sides said they were renegotiating terms of the deal, which originally valued Espotting at $163m.

Separately, FindWhat reported fourth quarter net profits of $3.5m compared with a year-earlier profit of $2.7m.

For 2004, the company offered guidance for revenue of $95m. Analysts surveyed by Reuters Research, a unit of Reuters Group, had expected revenue of $96.6 million.

"What I've seen during the first quarter earnings reports is that companies that provide guidance... in line with the current estimates has been viewed as not enough," Kaufman Bros. analyst Mark May said. "I would have thought that given FindWhat's history of raising guidance that investors would view the guidance as conservative, not cautious."

Shares in FindWhat fell to $19.15 in after hours trade on INET from a $19.44 close on Nasdaq.