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HealthCentral picks up assets

The health Web site agrees to buy several assets of the ailing online drugstore and a subsidiary for about $6 million. said Tuesday that it has agreed to buy several assets of ailing online drugstore and a subsidiary for about $6 million.

Under the deal, HealthCentral will acquire's Web site, customer lists, trademark and promotional agreement with retail drugstore Phar-Mor. It will also buy's home store, Comfort Living, including its Web site, inventory, and lease on a warehouse and distribution center in Maryland.

In exchange, will receive 5 million shares of HealthCentral common stock, worth approximately $5.95 million at the company's closing price Monday. cannot sell the shares before March of next year. The deal is expected to close in November.

Shares of HealthCentral were trading at $1.44 Tuesday, up about 20 percent from Monday's close of $1.19. They have traded as high as $14.38 in the past 52 weeks.

Despite its sagging stock price, Emeryville, Calif.-based HealthCentral has been on a buying spree in the past six months. In June, the company bought online retailer, and in September, it bought several assets of, a subsidiary of offline drugstore Drug Emporium.

"We have picked up valuable resources that strengthen our business model through cross-selling opportunities, better buying power and improved distribution costs," Albert Greene, HealthCentral CEO, said in a statement. "Importantly, we expect no ongoing, incremental cash burn to the company because of the acquisition of these assets."

San Francisco-based, which launched in August 1999, has been hit hard by the overall market decline. Like numerous other struggling e-commerce companies, other is cutting costs to reach profitability. Earlier this month, it laid off a third of its staff after an earlier round of layoffs in June.

In May, withdrew its filing for an initial public offering, just three months after it registered to sell shares worth about $86 million. The company was born from former health-products site The site changed its name last year when it expanded to include prescription drug sales and a broader line of health and beauty products.

In February, acquired Comfort Living, a 13-year-old home products distributor.

"With the continued consolidation in the e-commerce sector, we believe this sale is in the best interests of our customers and shareholders," Frank Newman, CEO of, said in a statement.

see A webcast: Dot-coms: Down and out? HealthCentral provides health-related content, products and prescription drugs through its network of sites, including,,, and

With the acquisition, HealthCentral hopes to improve its margin by selling Comfort Living's higher-priced items. The company also will gain access to's roughly 300,000 customers.

As part of the deal, employees of Comfort Living will be retained by HealthCentral. Up to 20 employees will help to move the Web site over to HealthCentral's system and then will be laid off.