Internet investment company NewMedia Spark has snapped up online financial news company GlobalNet Financial.com, a day after announcing that it has written off 11 of its unprofitable investments.
GlobalNet Financial.com, which is an online provider of financial news and information, cost £9.8m -- which NewMedia Spark will pay in newly issued shares. This is around 40 percent more than the market value of GlobalNet, according to its share price yesterday.
According to company officials, NewMedia Spark will effectively only pay £5m in the transaction, because GlobalNet held a significant number of shares in NewMedia Spark. "We're getting roughly £30m worth of assets for effectively a £5m share issue," NewMedia Spark director Joel Plasco told Bloomberg.
GlobalNet's directors have agreed to dispose of its business interests. NewMedia is then expected to invest in some of the companies which GlobalNet already holds shares -- which include EO plc and Synaptic Systems.
NewMedia Spark announced yesterday that it had made a loss of £46.3m in the twelve months to 31 March 2001. Its financial results suffered from heavy losses it made on a number of B2B dot-com companies in Sweden. Chief executive Mike Whitaker said yesterday that the company planned to use its cash reserves of £76.6m to make more investments in the near future, of which the purchase of GlobalNet is the first.
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