eUniverse, Inc. the interactive entertainment network, will acquire L90, the online media and direct marketing company, the firms announced today.
The cash deal, reportedly worth up to $55 million, will add more than $2 million in net income to the eUniverse balance sheet in the first 12 months, according to Brad Greenspan, CEO of eUniverse.
Stockholders will receive between $2 and $2.20 per share in cash, representing a premium above recent stock levels. However, it will be paid in two parts.
The first component will be a special cash distribution by L90 prior to the merger totaling between $1.80 and $2 per share. The amount would be based on the amount of cash held by L90 and the value of certain balance-sheet items. In the second part, eUniverse would acquire all of the outstanding shares at a price of roughly $.20 per share or $5.1 million in the aggregate. However, eUniverse’s net cash outflow would be $2 million because L90 would leave $3.1 million in the company to satisfy liabilities. According to Greenspan, the merger has been agreed to by the holders of more than 35% of L90’s stock.
EUniverse plans to use L90 Direct, L90’s direct marketing and list management division, as a distribution channel for its e-mail network. The firm’s e-mail newsletters and online database services will also be offered through L9Direct.
Several eUniverse Web products like Cupid Junction Fitness Heaven, will also be offered to the 100 Web sites in the L90 network.
Last year, L90 acquired Novus List Marketing, a Valhalla, NY-based list management firm.
Both eUniverse and L90 are based in Los Angeles.
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