Electronic news provider Desktop Data Inc is hitching up with competitor Individual Inc in a share swap, accounted for as a pooling of interests, which they describe as a merger of equals. The two – both founded in 1989 – will form a new company, NewsEdge Corp, which takes its name from Desktop’s flagship news and information delivery product. Under the agreement, Desktop shares will be exchanged for all outstanding shares, options and warrants of Individual based on an a rate of one share of Desktop’s common stock for each two Individual shares. Desktop shares closed at $10.125 on Monday, while Individual closed at $5.25. According to the chief executives of the newlyweds, the new entity’s goal is to establish itself as the market leader in the area of news integration which they reckon is a market growing at some 35% a year. The combined entity can boast revenues for the year ended September 30 of $75m, cash and marketable securities of $61m and $2.5m in debt and long term obligations. Pro forma consolidated results for the last nine months show an operating loss of $8.0m, and NewsEdge projects it will begin showing profit by the end of 1998, after a period of integration and more investment. The combined headcount is 436. Desktop chief executive Donald McLagan will head the new company, with Individual CEO Michael Kolowich serving as vice-chairman and head of the transition team. The boards and management teams of each company have committed their shares in favor of the merger, which is expected to close during the first quarter of 1998, pending general shareholder approval. Both companies are based in Burlington, Massachusetts and will stay put. NewsEdge expects to begin its life in a period of continuing growth, with no layoffs planned after the merger. It estimates it currently delivers about 50,000 stories from 2000 licensed sources each day to more than 1,000 companies worldwide.
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