Wall Street did not react favorably to DoubleClick Inc.’s announcement that it will acquire Abacus Direct Corp. in a stock swap. The Internet advertising pioneer’s stock plummeted 20.3% (or 18 1/16 points) to $70.75. (Its Nasdaq symbol is DCLK.)
The stock drop affected the projected price DoubleClick will pay for the information services company. In a statement yesterday, DoubleClick said it will issue 1.05 shares of its common stock for each share of Abacus common stock. Based on Friday’s closing price, that put the sale at around $1 billion. But after yesterday’s closing it was down to $806.5 million.
The Bloomberg News Service reported that the drop was due to fears that the purchase would jeopardize DoubleClick’s rapid revenue growth.
Abacus’ stock also fell, 9.5% to $67.50. (Its Nasdaq symbol is ABDR.)
The transaction is expected to be completed in late third quarter of 1999. New York-based DoubleClick, which had $80.2 million in 1998 revenue, sells advertising space on the Internet. Broomfield, CO-based Abacus, with $47 million in 1998 revenue, provides information services to the direct marketing industry and manages the nation’s largest proprietary database of consumer catalog buying behavior.
The combined company will keep the DoubleClick name and will be based in New York, with DoubleClick chairman and CEO Kevin O’Connor remaining in those capacities. Tony White, founder, chairman and CEO of Abacus, will join DoubleClick’s board and oversee the expansion of Abacus’ product lines onto the Internet. Abacus will continue to be based in Colorado.
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