Secure e-mail provider Tumbleweed Communications Corp has agreed to acquire Worldtalk Corp, which develops e-mail content filtering software. Under the terms of the deal, Worldtalk shareholders will receive a fixed exchange ratio of 0.26 Tumbleweed common shares for each share held. Based on Tumbleweed’s Thursday closing price of $42.875, the exchange ratio implies an $11.15 price per share for Worldtalk, giving the purchase a total value of $191m – a 9% premium over Worldtalk’s Thursday close.
Worldtalk, which introduced its first offering in 1997, claims revenue from content filtering of $4.9m in the current year to date, up from $1.7m last year. Content filtering was a capability Tumbleweed hadn’t been able to offer customers before the deal and the company says the rapid growth in Worldtalk’s business caught the eye of CEO Jeff Smith. Worldtalk’s technologies will be integrated with Tumbleweed’s integrated messaging exchange, an infrastructure used for both business-to-business and business- to-consumer communications.
The acquisition also brings Tumbleweed more than 400 customers, including Chevron, Nike, Time Warner, Glaxo-Wellcome and GE Capital. The deal, which will be accounted for as a pooling of interests, is expected to close in the first quarter of 2000.
