DoubleClick Inc intends to merge with NetGravity Inc in a stock- for-stock transaction worth an estimated $530m. The merged company will be called DoubleClick and will be based in New York. DoubleClick, which sells ads on its network of more than 1500 web sites, adds NetGravity’s internet advertising management software to the direct marketing data it acquired with Abacus Direct Inc in June 1999. Privacy activists raised objections to that acquisition on the grounds that DoubleClick and Abacus are likely to synchronize their databases. Whether the NetGravity buy will arouse similar concern remains to be seen.
Either way, the merger seems almost certain to attract the attention of regulators, since DoubleClick and NetGravity are now the two largest providers of internet advertising. AdKnowledge Inc is pretty much the only competitor left standing. DoubleClick will issue 0.28 shares of its common stock for each share of NetGravity stock. The exchange ratio represents a per share price of $26.32, which DoubleClick executives say is a 26% premium over NetGravity’s 30 day average stock price. The transaction will be accounted for as a pooling of interests. Subject to the usual approvals, the deal is expected to go close in the fourth quarter 1999.
