September 23, 1999 7:20 AM PDT

ISPs MindSpring, EarthLink to merge

MindSpring/EarthLink merger announcement
Charles Brewer, left, CEO of MindSpring and Garry Betty, CEO of EarthLink, embrace during the announcement of a merger between the two companies.
Internet service providers EarthLink and MindSpring today said they agreed to merge, creating a new company that will have a market capitalization of more than $3 billion.

The combined company, which will be called EarthLink, will have an estimated combined base of more than 3 million members upon the completion of the deal, the companies said in a statement. By comparison, competitor America Online has an estimated membership base of more than 18 million subscribers.

Under the agreement, MindSpring shareholders will get 1 share of the new company's stock for each share of its own stock, and EarthLink shareholders will get 1.62 shares of the new company's stock in exchange for each share of its own stock. The newly formed public company will trade under the ticker symbol "ELNK," both companies said.

Based on the closing price of both companies' stock yesterday, the new company will have a combined market capitalization of more than $3 billion and combined annual revenues of nearly $650 million, the companies said. Yesterday, shares of EarthLink closed up at 43.5, and MindSpring shares also closed up at 32.87.

The new company will be led by executives from both EarthLink and MindSpring. In the new company, EarthLink's chief executive Charles Betty will be the new company's CEO and MindSpring founder and chief executive Charles Brewer will be chairman. Mike McQuary, MindSpring's president and chief operating officer, will be the merged company's president, and EarthLink founder and chairman Sky Dayton will be a director.

The merger is expected to be completed during the first quarter of next year, the companies said. The new company will be based at MindSpring's current headquarters in Atlanta.

 

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