Gemstar-TV Guide International Inc. has agreed to buy airline flight catalog company SkyMall Inc., Phoenix, for about $47.6 million.
New York-based Gemstar, reportedly the biggest seller of electronic television program guides, will pay shareholders $1.50 in cash and .03759 (about 1/26th) of a share of common stock for each SkyMall share. The transaction values SkyMall at $2.85 a share and is expected to be completed by August, SkyMall said.
The firm plans to expand its relationships with SkyMall’s airline, store and marketing partners as well as its online affiliates.
SkyMall notes that it will benefit from increased promotion by Gemstar, which also publishes TV Guide and operates that magazine’s Web site.
Robert Worsley, SkyMall’s chairman, chief executive officer and founder, has entered into a long-term employment deal with Gemstar and will become SkyMall’s CEO.
SkyMall’s board of directors unanimously approved the transaction.
SkyMall’s in-flight catalog can be found on more than 70% of all domestic airlines, reaching about 420 million domestic passengers annually. Through its Skymall.com Inc. subsidiary, which operates the Skymall.com Web site, the catalog firm offers an expanded selection of products and services.
SkyMall’s total net merchandise sales for 2000 were $62.5 million, a 3% increase over 1999’s total of $60.7 million. Net merchandise sales from the Web were $15.5 million, or 30% of business-to-consumer net merchandise sales in 2000, compared with $13.1 million, or 25% of B-to-C sales, in 1999. Total revenue in 2000 was $82.1 million compared with $78.9 million in 1999
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