IAR Bits and Bytes

iVillage Completes Acquisition of Promotions.com

Women-oriented Web publisher iVillage has closed on its acquisition of Promotions.com.

Shareholders of the New York-based direct marketing and promotions firm agreed to the acquisition on Friday. As a result, iVillage, also based in New York, acquired all the outstanding shares of Promotions.com’s stock that it did not already own following the completion of an exchange offer on April 18. Promotions.com trades on the Nasdaq OTC Bulletin Board.

iVillage will issue 0.1041 shares of its stock to Promotions.com stockholders for each share of Promotions.com stock, as well as $0.64 in cash, worth a total of $0.83 per share, a penny over Promotion’s currently stock price at press time.

Through the arrangement, first announced in February, iVillage said it expects to issue an aggregate of approximately 1.6 million shares of IVIL stock, as well as approximately $9.8 million in cash.

The acquisition is designed to boost iVillage’s advertiser base and to create cross-company synergies to encourage client spending. Promotions.com clients include Kraft Foods , Citibank and General Electric’s NBC.

“This acquisition benefits both iVillage and Promotions.com customers by bringing a new level of depth to both our offerings, further enhancing our strength with advertisers,” said iVillage Chairman and Chief Executive Doug McCormick. “We can now offer an even stronger competitive and complete solution to our advertisers.”

ValueClick Finalizes Be Free Buyout

Westlake Village, Calif.-based ad network and server ValueClick completed its acquisition of affiliate marketing services provider Be Free.

The purchase adds Be Free’s affiliate marketing practice to ValueClick’s own ad representation, network and co-registration businesses, all of which are priced based on performance.

“By offering customers a much broader suite of online marketing products and services than either company could offer on its own, the newly combined company will be a more effective competitor in the online marketing arena,” it said in a statement.

Under the terms of the deal, first announced in March, each Be Free common share was converted into 0.65882 shares of ValueClick stock. When the merger is completed, Be Free’s stockholders will own about 45 percent of the combined company’s outstanding shares.

As a wholly-owned subsidiary of ValueClick, Be Free will contribute three members of ValueClick’s board of directors, including former chairman and chief executive Gordon Hoffstein.

ValueClick also adds $270 million in cash and marketable securities to its coffers through the purchase.

Engage Faces Delisting

It’s been a rough week for Engage , the Andover, Mass., provider of online advertising software.

On Tuesday, it abandoned projections of operating profitability by year’s end. What’s more, Internet investor CMGI offered $11 million for the for 24 percent stake it doesn’t already own.

And on Thursday, Engage was notified that its shares are in jeopardy of being delisted for failing to meet Nasdaq requirements, which includes a $1 minimum bid price. The stock closed down 0.01, or 5 percent, on Thursday, to 0.2. In the last 52 weeks, the share price has ranged from 0.16 to 1.48.

Engage has until June 14 to regain compliance and said it has requested a hearing with market officials.

“We are taking action in an attempt to rectify this situation, and remain focused on building our position in the digital asset management and Internet advertising markets,” said Engage President and Chief Executive Christopher Cuddy.

The likely move is a 1-for-five, 1-for-10 or 1-for-15 reverse stock split. CMGI, also based in Andover, Mass., had approved that plan.

The final ratio will be “based on [Engage’s] determination of which reverse stock split will result in the greatest marketability and liquidity of the company’s common stock,” the company said.

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