The $67 million investment in Allopneus will help Michelin better understand online tire buyers, the tire maker says.
Onsale Inc. and Egghead.com, Inc. are merging. The companies have a combined 1999 sales rate approaching $500 million based on current trends, and reported over $160 million in cash at the end of the March quarter. In addition, with over three million estimated unique monthly visitors and approximately 2.8 million combined customer records, the company expects to rank number one in traffic among online technology retailers. The new company will operate under the name and web address of "Egghead.com" with auctions and sales of surplus goods under the Onsale banner.
The merger will be effected by exchanging .565 shares of Onsale for each outstanding share of Egghead.com, valued at approximately $400 million, in a tax-free transaction, resulting in current Egghead.com shareholders owning approximately 47 percent of the combined company. The merger is intended to be a pooling of interests, and is subject to approval by shareholders of both companies, regulatory approval and other customary conditions. Executives and directors of both companies have agreed to vote their shares in favor of the proposed transaction.
"On the Internet, scale and brand matter," said Jerry Kaplan, Onsale's CEO. "Our plan is simple: combine two top technology retailers to create a clear market leader; pool our marketing budgets to drive a single brand around the Egghead.com name; leverage the resulting traffic with Onsale's high visitor-to-customer conversion rates; and increase efficiency by eliminating duplicative operating costs. This enhanced scale and brand should permit us to offer excellent prices to consumers while providing an outstanding pre-and post-sales Internet shopping experience."
"This business combination represents a further step in the dramatic evolution of Egghead.com as a leading Internet commerce company," said George Orban, Egghead.com's CEO.
The new Egghead.com will be headquartered in Menlo Park, California, with operations situated there and in Vancouver, Washington. Egghead.com's George Orban will become chairman of the combined company, and Onsale's Jerry Kaplan will serve as chief executive officer. The board of directors will consist of four directors from each company and one director selected mutually. Executives from both companies will join together to form a single management team.