MemberWorks Inc., Stamford, CT-based, which provides consumer and membership services through affinity marketing and online channels, has sold its online credit service subsidiary iPlace Inc. to online real estate marketplace Homestore.com for $150 million in cash and stock.
MemberWorks received approximately $52 million in cash (including repayment of debt) and 1.6 million shares of Homestore.com common stock valued at approximately $36.0 million. Under the terms of the agreement, MemberWorks is prohibited from selling any Homestore.com stock for a period of 120 days after the closing date and subsequently may only sell 1/12th of the shares in any calendar month. This transaction is expected to result in a pre-tax gain in excess of $60 million.
MemberWorks expects to use the cash for general corporate purposes including the repurchase of treasury shares. As of June 30, 2001 Memberworks had approximately 699,000 shares authorized for repurchase under its current stock buyback program.
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