Advertisement
YOU ARE HERE: LAT HomeCollections

California

EUniverse to Buy Direct Marketing Firm L90

Web: Los Angeles entertainment company will pay $55million in effort to expand its audience.

January 04, 2002|P.J. HUFFSTUTTER | TIMES STAFF WRITER

Hoping to expand its audience in a tightening Internet market, Los Angeles online entertainment company EUniverse Inc. said Thursday that it agreed to buy advertising firm L90 Inc. for about $55 million.

The deal comes as investors continue to doubt the viability of online profits and question whether ad sales will continue to slump--and therefore continue to drag down the valuations of content-related sites, from giants such as Yahoo Inc. and America Online to smaller outlets such as EUniverse.

The slump also has hit online ad companies' bottom lines. L90, based in Marina del Rey, is one of the Internet's largest direct-marketing companies. It has reported a string of increasing losses over three of the last four quarters, including a $16.7-million deficit on nearly $18.2 million in revenue for the quarter ended Sept. 30.

EUniverse operates a network of entertainment-related sites such as FlowGo.com and Cupid Junction. The company has slowly been posting a steady profit over the last four quarters, with $851,765 in income on $6.7 million in revenue for the quarter ended Sept. 30.

The acquisition is expected to add more than $2 million to EUniverse's profit in the first 12 months after the deal is completed, said Brad Greenspan, chairman and chief executive of EUniverse.

Under terms of the deal, EUniverse agreed to pay L90 stockholders between $1.80 and $2 for each share, depending on various issues such as the amount of cash on L90's balance sheet. EUniverse officials said the company also would pay another 20 cents per L90 share. The deal, which has been approved by each company's board of directors, is expected to close in the next three months.

EUniverse shares, which have soared 214% over the last year, slipped 6 cents, to $6.08. L90 gained 39 cents, to $1.95, both on Nasdaq.

Advertisement
Los Angeles Times Articles
|
|
|