Intuit sells insurance business to InsWeb
Shares of the financial software developer Intuit rose 1.31 to 47.06. InsWeb jumped 6.25 percent, up 0.13 to 2.13.
Under the deal, InsWeb will acquire the assets and related liabilities of Intuit's QuickenInsurance business. Intuit will receive a 16.6 percent stake in InsWeb, putting the merger at $14 million based on the price of outstanding shares at Friday's closing price.
The deal is expected to close in the first quarter of 2001.
Intuit said it doesn't expect the deal to impact on its fiscal year 2001 revenue growth target of 22 percent. The company expects improvement in pro forma operating income of between $3 million and $5 million, to be distributed in Intuit's third and fourth fiscal quarter results. Associated costs of the deal will be approximately $10 million.
Separately, the companies signed a five-year deal that would make InsWeb the exclusive Website for insurance estimates for Intuit's Quicken.com and QuickenInsurance Web sites, and certain consumer desktop services. In exchange, Intuit will take a share of the associated revenue.
Shares of Intuit have fallen recently, despite the company posting a smaller than expected first quarter loss.
Reuters contributed to this report.