[JA] Juno and NetZero Complete the Merger
- From: George H Lunt <glunt@xxxxxxxx>
- To: juno_accmail@xxxxxxxxxxxxx
- Date: Tue, 25 Sep 2001 20:06:37 -0700
News Release Posted on the FreeNet list by Phillip Finlaw...
> NetZero and Juno Complete Merger Creating United
> Online; Combination Unites Leaders in the Value
> Segment of the Internet Access Market
>
> WESTLAKE VILLAGE, Calif., Sept. 25, 2001 (PRIMEZONE) -- NetZero, Inc.
> (Nasdaq:NZRO) and Juno Online Services, Inc. (Nasdaq:JWEB), two of the
> nation's leading Internet service providers (ISPs), today announced the
> completion of their merger to form a new public company, United Online,
> Inc. United Online now owns both of these popular consumer Internet
> brands, which on a combined basis as of June 30, 2001, reported more
> than 6.7 million active users in the United States and Canada,
> including approximately 1.1 million billable subscribers.
>
> The merger was finalized today following the approval by both
> companies' stockholders at their respective stockholder meetings. The
> new company, United Online, Inc., will begin trading tomorrow, Sept.
> 26, 2001, on the Nasdaq National Market under the ticker symbol "UNTD."
>
> Based on unaudited, pro forma results for the quarter ended June 30,
> 2001, United Online's revenues totaled $41.3 million. Revenues from
> billable services accounted for 70% of total revenues, or $29.0
> million, while the remaining $12.3 million came from various forms of
> advertising and electronic commerce. United Online's pro forma cash
> balances as of June 30, 2001 totaled $177 million, or $4.42 per share
> based on approximately 40 million shares of United Online common stock
> outstanding upon completion of the merger. Management expects to incur
> restructuring and other transaction costs of between $20 million and
> $25 million as a result of the merger.
>
> "This merger establishes a new and more formidable player among the
> leaders in the ISP market," said Mark R. Goldston, chairman, chief
> executive officer and president of United Online. "In just a few years,
> NetZero and Juno have amassed millions of users, and we see significant
> opportunities ahead for United Online as consumers become increasingly
> aware that they can get high-quality Internet service for less than
> half the price of many of our major competitors.
>
> "This management team is focused on the opportunities afforded by
> merging these two outstanding companies," Goldston continued. "We
> recently announced that, beginning in October, NetZero's free service
> will be limited to 10 hours per household per month and will not be
> available in all areas, which we believe will decrease our free service
> costs. In addition, we believe the synergies resulting from the merger
> of NetZero and Juno will help to further reduce the per-user cost of
> our free and billable services. By continuing to offer cost-effective
> free Internet access while marketing an attractively priced,
> high-quality billable service, we believe we can increase billable
> services revenues while decreasing expenses. While we expect to
> continue to generate revenues from online advertising, our primary
> focus will be on billable services."
>
> "By combining two companies with similar product lines and coverage
> areas, there are several opportunities to reduce costs and create a
> single enterprise that is financially stronger and more efficient,"
> said Charles S. Hilliard, United Online's chief financial officer.
> "Upon signing the merger agreement, we had already identified the major
> strengths and overlap between the two companies that we believe will
> generate efficiencies going forward, including the elimination of
> telecommunications infrastructure redundancies, consolidation of
> billing systems, and facilities and workforce rationalization. Now that
> the merger is completed, we will continue to evaluate opportunities to
> capitalize on these synergies while looking for additional ways to
> create value for our stockholders." "Juno has built an outstanding
> platform of users, technologies and assets that will benefit United
> Online going forward," Goldston added. "These achievements are
> reflective of a group of outstanding employees, spearheaded by CEO
> Charles Ardai and CFO Harshan Bhangdia. While Charles, Harshan and
> certain other members of the Juno team will not continue with the new
> enterprise, we at United Online thank them for all of their efforts and
> wish them the best in their future endeavors. With respect to the many
> employees who will remain with Juno, I would like to welcome them to
> the United Online family."
>
> Structure of the Merger
>
> Under the terms of the agreement, NetZero and Juno became wholly owned
> subsidiaries of United Online, Inc. All outstanding shares of both
> companies will be exchanged for shares of United Online in an all-stock
> transaction. NetZero stockholders will receive 0.2000 shares of United
> Online stock for each share of NetZero, and Juno stockholders will
> receive 0.3570 shares of United Online for each share of Juno.
> Immediately following the closing of the transaction, United Online had
> approximately 40 million shares of common stock outstanding.
>
> Consumer Product Line
>
> United Online provides consumers with a high-quality Internet access
> that fits both their needs and their budgets. The company features two
> major brands of Internet access service -- NetZero and Juno -- which
> currently offer free, ad-supported Internet access and value-priced
> billable Internet access services on a monthly subscription basis.
>
> Both the NetZero and Juno Internet access plans offer consumers
> easy-to-use services and some of the best product offerings on the
> Internet. The pay Internet access services feature faster page-loads,
> no banner ad windows and are generally priced at less than half the
> cost of the standard service offerings from companies such as AOL,
> Earthlink and MSN. A user of one of the United Online services from
> NetZero or Juno will have the ability to exchange email with any other
> Internet user, use popular and widely available Instant Messaging
> programs such as those offered by AOL, Yahoo!, MSN and others, and
> access search engines, news and sports content and some of the best
> online shopping and financial services available.
>
> Advertising Opportunities
>
> United Online gives advertisers and sponsors various ways to get their
> messages to the mass Web audiences of both Juno and NetZero. Products
> offered include a broad range of state-of-the-art targeting techniques
> for online advertising, email campaigns, start page placements, channel
> sponsorship opportunities and the ability to run full-motion video
> commercials online through NZTV.
>
> In addition, United Online can provide advertisers with sophisticated
> market research capabilities through NetZero's CyberTarget Division.
> With access to millions of NetZero and Juno users, CyberTarget can
> produce real-time market research in an Internet environment that few
> others can replicate. More information about CyberTarget can be found
> at www.cybertarget.com.
>
> About United Online
>
> United Online is a leading nationwide Internet Service Provider (ISP).
> The company commenced operations in September 2001 as the result of its
> acquisition of NetZero and Juno Online Services -- two of the leading
> Internet access brands in the United States and Canada. Through its
> subsidiaries, United Online offers both free and value-priced Internet
> access services in more than 5,000 cities. The company is headquartered
> in Westlake Village, Calif., with offices in New York City and
> Hyderabad, India. United Online's common stock will be traded on the
> Nasdaq National Market under the ticker symbol "UNTD."
>
> For more information about United Online and its Internet access
> services, please visit www.unitedonline.net
>
> Active users are defined as all registered user accounts that connected
> at least once during the month, together with all subscribers to a
> billable service, in each case regardless of the type of activity or
> activities engaged in by such subscribers.
>
> This release contains forward-looking statements within the meaning of
> the "safe harbor" provisions of the Private Securities Litigation
> Reform Act of 1995. These statements are based on management's current
> expectations or beliefs and are subject to a number of factors and
> uncertainties that could cause actual results to differ materially from
> those described in the forward-looking statement. The following
> factors, among others, could cause actual results to differ materially
> from those described in the forward-looking statements: inability to
> successfully integrate the NetZero and Juno businesses; unexpected
> costs related to the merger or integration of the NetZero and Juno
> businesses; failure of anticipated synergies to materialize;
> uncertainty of the business model and limited operating history;
> inability to manage growth or expenses, maintain the quality of the
> services or achieve profitability; failure of the current free user
> base to migrate to billable services; potential duplication between
> user bases; increased competition and its effects on pricing, spending,
> third-party relationships, the subscriber base and revenues; inability
> to establish and maintain relationships with commerce, advertising,
> marketing, technology and content providers; inability to generate
> advertising or fee-based revenues and to decrease telecommunications
> costs; inability to retain key personnel of NetZero or Juno; inability
> to maintain or grow the United Online subscriber base; inability to
> develop, market and sell new products and services; and potential
> delays, bugs or other problems associated with new products. United
> Online's business will be subject to the risks inherent in each of
> Juno's and NetZero's existing businesses. More information about
> potential factors that could affect the combined company's business and
> financial results is included in United Online's registration statement
> on Form S-4, NetZero's most recent Form 10-K and Juno's most recent
> Form 10-Q and other filings with the Securities and Exchange Commission
> (http://www.sec.gov) including (without limitation) information under
> the captions "Management's Discussion and Analysis of Financial
> Condition and Results of Operations" and "Risk Factors."
>
> NetZero(r), Defenders of the Free World(r), the NetZero logo,
> zCast(tm), NZTV(tm), CyberTarget(tm), CyberYield(tm) and The
> ZeroPort(tm) are trademarks of NetZero, Inc. Juno(r) is a trademark of
> Juno Online Services, Inc. All other names are trademarks and/or
> registered trademarks of their respective owners.
>
>
> -0-
> CONTACT: NetZero, Inc.
> Liz Gengl, Media
> (805) 418-2076
> egengl@xxxxxxxxxxxxxxxx
>
> Peter Delgrosso, Media
> (805) 418-2388
> pdelgrosso@xxxxxxxxxxxxxxxx
>
> Brent Zimmerman, Investors
> (877) 280-6380
> investor@xxxxxxxxxxxxxxxx
>
>
>
>
>
> ---------------------------------------------------------------------
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