MyPoints acquires Cybergold
MyPoints.com Inc. has agreed to acquire Cybergold Inc. in a $157 million stock swap, the two Internet loyalty companies said Monday.
The newly created firm will have 15.4 million members. MyPoints (MYPT) said the deal, which is expected to close in the third quarter, will add to revenues and earnings per share by fiscal 2001.
Cybergold CEO Nat Goldhaber will become vice chairman at MyPoints and will be responsible for managing future products. Once the deal is complete, Cybergold shareholders will own around 26.5 percent of the combined company. Cybergold will also be given the right to nominate an additional board member.
Before the deal is closed, Cybergold will spin off its payment technology business, PayTime.com, although MyPoints will retain a 19.9 percent stake in the division.
Loyalty programs like the ones run by MyPoints and Cybergold allow consumers to earn online credits for shopping online, visiting Web sites, viewing ads or giving out demographic data. The points and credits can then be redeemed for other goods.
Analysts following the loyalty industry have speculated that mergers and alliances may be needed to allow the firms to develop their true potential.
Cybergold (CGLD), for instance, recently signed a deal with RocketCash Corp. that will allow users to exchange its currency for RocketCash's.
MyPoints and Cybergold said today that they only shared five clients of their Top 25 advertisers and anticipated doing extensive cross-selling.
MyPoints will also get control of two Cybergold patents covering attention brokerage and privacy management.