ALLOY ACQUIRES TEEN CONTENT PROVIDER
NEW YORK — Multimedia player Alloy Online has added a new business to its growing stable of properties, with the acquisition of Carnegie Communications, a provider of publications and Web sites about high schools and colleges.
Under the terms of the agreement, announced last week, Alloy has issued about 1.3 million shares of its stock and paid $5 million in cash and future consideration. Shares of Alloy added 15 cents to close at $35.70 in Nasdaq trading Tuesday.
“We think this is another way to reach the teen demographic,” said Matt Diamond, Alloy’s founder and chief executive officer. “This acquisition allows us to provide important information about colleges and universities to our teenage audience, while adding academic institutions to our sponsorship revenue base. We think there are a lot of synergies here.”
In addition to its Web site and catalogs, Alloy, based in New York, has a book division and is working with various entertainment companies to feature its products in movies and on television. Alloy now mails between three million and five million catalogs a month, Diamond said.
The ceo noted Alloy is looking into additional acquisition deals but declined to elaborate. Like many dot-coms scrambling to survive the Web’s biggest wave of consolidation, Diamond said, “We are constantly looking at opportunities, but they have to fit in with our business. Without commenting on specific acquisition targets, getting traffic for the benefit of traffic is not appealing to us.”
Its most recent acquisition will provide Alloy with slightly different content. While its Web site currently focuses primarily on entertainment and shopping, Carnegie’s properties profile colleges and universities, and serve as a recruiting tool for those institutions. Schools profiled are charged a fee to appear on the sites and in the publications. Founded in 1986 with its flagship publication, Private Colleges & Universities, Carnegie now publishes more than 30 titles anually and the Web sites privatecolleges.com, acuinfo.com, and collegeXpress.com, targeting high school students by region, academic interest, and achievement level.
Although he did not cite Carnegie’s sales, Diamond did say the educational content provider is expected to contribute “modest” revenue to Alloy for the remainder of this fiscal year, but will not achieve profit. For 2002, Carnegie is expected to generate revenues of $3 million and earnings before interest, depreciation, taxes, and amortization of $1.4 million. Alloy recently reported that it achieved profit on a cash basis, for the fourth quarter ended Jan. 31, earning $779,000, or 4 cents a share, before charges. The company’s sales for the quarter came to $35.6 million.