ServiceMagic To Acquire ImproveNet
The combination will create a new, "comprehensive and targeted" Internet marketing solution for residential contractors, say the companies. ServiceMagic has agreed to buy all of the outstanding shares and in-the-money warrants and stock options of ImproveNet for approximately $6.72 million in cash or approximately $.12 per share.
Together, ServiceMagic and ImproveNet will offer residential contractors and home service professionals a range of interactive services and solutions for marketing and managing their businesses online. The combined consumer bases and contractor networks are expected to drive more leads to participating contractors and improve choice for consumer members. The increased demand is projected to result in more than 165,000 consumer service requests every month to member contractors, which represents an estimated $400 million in monthly home improvement related spending by homeowners.
"By joining forces with ImproveNet, we will be well positioned to capitalize on the growing number of consumers seeking home service professionals and information on home improvement projects through the Internet," said Rodney Rice, co-CEO of ServiceMagic. "Our combined resources will improve both of our existing services to meet our growing consumer demand."
Subject to completion of the transaction, ImproveNet business lines will transition to ServiceMagic, including ImproveNet.com, AdServePROâ„¢, ImproveNetPRO.com, 1-800-Contractor, and 1-800-Contractor.com. The transaction is expected to close in the third quarter of 2005, at which point the services will be combined.
"We are excited to join forces with ServiceMagic," said Jeffrey Rassas, CEO of ImproveNet. "We believe this combination will drive significantly greater lead flow to our contractors, increased exposure for advertising partners, and improved choice for our homeowners."
The transaction is subject to customary closing conditions, including approval of ImproveNet's shareholders, which if not satisfied in the anticipated timeframe would cause an extension of the expected close date. Under a separate agreement, certain members of ImproveNet's senior management, each of whom are significant shareholders of ImproveNet, have agreed to support the transaction.
Publication date: 07/04/2005