iVillage said it will swap 0.322 shares of iVillage common stock for each share of Women.com (womn). In addition, iVillage (ivil) will pay about $250,000 in cash. The entire transaction is valued at $47 million, based on iVillage's closing stock price of $1.69 on Feb. 2.
Women.com shares closed at 72 cents Monday and have traded as high as $15 in the past year. iVillage shares, which traded above $100 at the height of the dot-com boom, are now below $2.
The companies said they will use their combined resources to develop additional revenue streams, such as subscription plans, and perhaps create a separate research company.
"By joining together, we will further elevate iVillage and provide women online with an even broader spectrum of offerings than ever before," Women.com CEO Marleen McDaniel said in a statement.
The deal is expected to close in the second quarter of 2001.
Separately, iVillage (ivil) posted a fourth-quarter loss of $9.8 million, or 34 cents a share, compared with a loss of $29.9 million, or $1.04 a share, a year earlier.
Excluding impairment of goodwill and a writedown of investments, the company had a loss of 32 cents a share, compared with a loss of 91 cents a share, excluding the same items, a year ago.
Fourth-quarter revenue rose 12 percent to $18.7 million from $16.7 million a year ago. The company said revenue would fall to $12 million to $14 million in the first quarter due to a soft advertising environment.
Ivillage Chief Executive Doug McCormick, who will serve as chairman and chief executive of the combined entity, said that the deal "creates the most comprehensive destination to meet the everyday needs of women online."
Through a registered rights offering, Hearst Corp. and Women.com's other public stockholders will have the opportunity to invest an aggregate of $20 million in iVillage in exchange for approximately 9.3 million shares, and warrants to purchase an additional approximately 2.1 million shares, of iVillage common stock. If any of Women.com's other stockholders don't purchase their pro rata percentage of iVillage shares and warrants in the rights offering, Hearst has agreed to purchase any shortfall.
Hearst also committed to purchase from iVillage about $15 million to $21 million in production and advertising services over a three-year period.
Women.com's McDaniel will assist the new company through its transition period. Three designees of Hearst will be appointed to the iVillage board. Other management structure decisions will be determined at a later date.
The transaction is subject to the approval of the stockholders of iVillage and Women.com, and certain regulatory and customary closing conditions. Hearst Communications Inc., which owns approximately 46 percent of Women.com, has agreed to vote all of its shares of Women.com in favor of the transaction.
The Wall Street Journal Interactive Edition contributed to this report.