The acquisition of the Fort Worth, Texas-based ISP is Prodigy's third since it went public in February, the company said. Last month, Prodigy bought BizOnThe.net, the Web-hosting subsidiary of privately held VarTec Telecom, for $100 million in cash and stock. In May, the company bought the U.S. consumer Internet service of Cable & Wireless.
Under terms of today's deal, Prodigy will issue 0.35 shares of common stock for each share of FlashNet common stock outstanding on the day the transaction closes, the firm said.
The FlashNet buy will increase Prodigy's 1.2 million membership by 244,000, the company said.
"In a single transaction, Prodigy acquires a talented pool of dedicated employees and significantly bolsters our infrastructure, customer service operations, and acquisition channels," Samer Salameh, chief executive of Prodigy, said in a statement. "FlashNet is an attractive acquisition target that further strengthens Prodigy's position in the ISP marketplace."
Prodigy said approval by its shareholders is not required. FlashNet shareholders do have to approve; Prodigy said a "significant percentage" has agreed to vote in favor of the deal. Closing of the deal is expected in the first quarter of 2000, Prodigy said.