E-Stamp To Merge with Learn2.com

E-Stamp (Nasdaq: ESTM) completed its ongoing transformation from an Internet postage business Friday, announcing it is merging with Learn2.com to focus on the corporate e-learning market. E-Stamp will phase out its shipping and logistics services.

The new company, to be called Learn2 Corporation, will have approximately US$15 million to $17.5 million in working capital and will be debt-free, the companies said. Robert "Bo" Ewald, president and chief executive officer of E-Stamp, will assume the position of chairman of the merged companies.

Upon completion of the merger, E-Stamp shareholders will own approximately 50.1 percent of the new company and current Learn2.com shareholders, including its current convertible debenture holder, will own the remaining approximately 49.9 percent. Debenture is unsecured debt backed only by the credit or integrity of the borrower, not by collateral.

"With the strong balance sheet that the merger will provide, we believe the company will be a legitimate contender for market leadership and profitability," Learn2.com chairman of the board Donald Schupak said.

Saved By the Merger

Learn2.com is a corporate learning service provider focusing on distance learning services delivered over the Internet. In early January, the company announced that its revenues for Q4 would be lower than forecast, primarily due to lower revenues in the retail channel of distribution.

Shares of Learn2.com were delisted from Nasdaq for failing to comply with the $1 minimum closing bid price.

"Learn2.com was searching for capital to fuel its growth and repay its debt and E-Stamp will provide resources to enable both," Schupak said.

Evolving Door

The Internet postage business has failed to gain much interest from consumers and businesses. In February, E-Stamp reported a net loss of $112.8 million, or $3.04 per share, for 2000. The company also let 45 employees go, staff cuts that came in addition to the 30 percent of its workforce laid off in November.

Also in November, E-Stamp began to phase out its online postage business to concentrate on Internet-based shipping and logistics. E-Stamp was the first company to receive U.S. Postal Service approval for Internet postage technology and the first company to offer Internet postage commercially.

Former rival Stamps.com announced earlier this week that it will be seeking additional sources of revenue, including possibly raising its monthly minimum price of $1.99 for its "simple plan" customers.

In February, Stamps.com slashed 50 percent of its workforce, but its losses shrunk in the fourth quarter of 2000 to around $9 million. The company also said at that time it will be operating in the black in the first quarter of 2002.