Gobbles Up Fatbrain

Furthering the trend toward e-tail consolidation, (Nasdaq: BNBN) announced late Wednesday that it will purchase online professional and technical bookseller (Nasdaq: FATB) in a deal worth roughly $64 million (US$).

After the deal closes, the Santa Clara, California-based will become a wholly owned subsidiary of, but will continue to operate as an independent entity.

“We are extremely excited about our proposed merger with,” said Dennis Capovilla, president and chief executive officer of Fatbrain. “The synergies derived from our book businesses are an obvious fit and will naturally benefit from increased scale,” he added.

will be comprised of 75 percent stock in and 25 percent cash for each share.

Fatbrain closed Wednesday at $4.39.

Fatbrain’s senior managers, including Capovilla and executive vice president of product development Kim Orumchian, are expected to continue in their current positions.

In addition to running a stand-alone online bookstore, also has more than 500 co-branded online bookstores and information resource centers at a variety of companies, including Ford Motor Company, Microsoft and Hewlett-Packard. Each distributes both third-party published works and proprietary corporate materials from the sponsoring company. says that its Web-based services reach more than 3.5 million employee desktops at almost 350 Fortune 1000 companies worldwide.

Adding MightyWords

With the acquisition of, also ups its stake in MightyWords — a former subsidiary and online provider of digital content — to approximately 50 percent.

In June, invested approximately $20 million for a 30 percent equity stake in MightyWords, and retained an equity stake of approximately 23 percent in the company.

Latest Financial Results

On Wednesday, also released its quarterly financials for the second quarter of fiscal 2001, which ended July 31st. The company reported a pro forma net loss for the second quarter of $8.0 million, or $0.62 per share, compared to a net loss of $5.9 million, or $0.52 per share in the same quarter of the prior year and a pro forma net loss of $8.5 million, or $0.65 per share, for the preceding quarter. Pro forma online revenue for, excluding revenue from MightyWords and before the completion of its financing on June 5, 2000, totaled $13.6 million. This figure reflects an increase of 134 percent from online sales of $5.8 million for the second quarter of the prior year, and an increase of 12 percent from pro forma online sales of $12.1 million for the preceding quarter. Total pro forma revenue, which includes sales generated by two physical retail stores and trade shows, totaled $15.3 million, compared to revenue of $7.4 million for the same period last year and $14.0 million of pro forma revenue for the preceding quarter.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

E-Commerce Times Channels