FindWhat.com, a developer and provider of performance-based marketing services for the Internet, today announced plans to acquire privately-owned Miva Corporation, a leading supplier of e-commerce software and services to small and medium-sized businesses, for $5.5 million, plus the assumption of approximately $2.5 million in notes and other liabilities.
Together with Miva, FindWhat.com would offer a more complete, comprehensive business solution to small-to-medium sized enterprises ("SMEs"). SMEs can utilize Miva Merchant software to create fully operational online storefronts with shopping cart capability and can purchase other complementary e-commerce services through Miva's additional plug-ins and modules. Through FindWhat.com, online marketers are able to cost-effectively promote their websites and find highly qualified prospects who have already expressed an interest in their product or service.
"FindWhat.com is focused on the needs of the small-to-medium sized business," stated Craig Pisaris-Henderson, chairman and chief executive officer of FindWhat.com. "Miva Merchant can be a valuable addition to our service offering--we help SMEs promote their online business, and, under this proposed transaction, we also will help them to create and manage their online business. This is a first step toward our goal of expanding our capabilities so that we can help online merchants find, get and keep customers--the complete equation that breeds success for any business. In addition, we believe this combination can provide more opportunities to Miva's hosting partners."
"Marrying our strong software capability to the excellent service capability of FindWhat.com should provide an optimal solution for online merchants," said Joe Austin, president and chief executive officer of Miva. "We have both focused on the SME market and have developed specific products and services aligned to their unique needs."
Founded in 1996, Miva Corp. has been an e-commerce market leader since 1998. As of June 2003, Miva had a base of over 70,000 registered users of its flagship Miva Merchant product, with over 85,000 storefront registrations, and, over the last 24 months, has added approximately 2,000 new merchant registrations on average per month. Miva currently sells to the majority of US hosting companies, and has signed up more than 1,100 hosting, technology and value-added distribution partners.
Upon the successful completion of the merger, the two companies plan to continually advance state-of-the-art technology, solutions and services for the small to medium-sized business.
Under the proposed terms of the transaction, which was approved by the board of directors of each company, Miva would become an operating division of FindWhat.com. Joe Austin, president and chief executive officer of Miva, would be general manager of the new division, which is based in San Diego, CA. The acquisition is expected to close by the end of 2003, subject to customary closing conditions.
Miva shareholders would receive $2.7 million in cash and $2.7 million in FindWhat.com common stock. The number of shares of FindWhat.com stock to be issued is to be based on FindWhat.com's average closing stock price prior to the consummation of the merger; however, FindWhat.com would not issue less than 94,310 shares or more than 182,333 shares to Miva's shareholders.
Miva recorded revenue of $2.6 million in 2002 and $1.0 million in the first six months of 2003. Miva had a GAAP net loss of approximately $0.8 million in 2002 and $0.4 million in the first six months of 2003. These figures are based on unaudited internal financial statements of Miva.
"We believe the proposed purchase of Miva will not have a material impact on our earnings per share in 2003 or 2004," said Phillip Thune, COO/CFO of FindWhat.com. "However, we place significant value on the potential to leverage Miva's relationship with 70,000 registered users and 1,100 hosting partners, as well as introduce the Miva suite of services to our 25,000 active advertisers. Over time, we believe Miva can be an integral part of a more complete service offering to our advertisers."