The cash-strapped software maker and Learn2.com agree to merge in order to jointly tackle the growing online-learning market.
Under the deal, E-Stamp, which was once a popular name in the Internet postage sector, makes another change in direction. The company will phase out its existing software business, which focuses on providing clients with shipping and logistics applications.
The combined company will operate under Learn2's name and focus on the corporate online-learning market, providing Web-based educational software and online tutorials. The deal, which is subject to customary conditions, is expected to close in the third quarter.
Most Internet postage companies have fallen by the wayside after failing to drum up sufficient customer interest. A number of upstarts have also suffered from the overall dismal climate for Net-only businesses.
E-Stamp officially exited the business last November after it had struggled to gain momentum against larger competitors including Pitney Bowes, which has a lock on the metered mail market, and the U.S. Postal Service, with its fast-growing Net program.
With the merger agreement, E-Stamp, based in Mountain View, Calif., is making a move into a more rapidly growing market. The online-learning industry is expected to grow from $6.3 billion in 2001 to more than $23 billion in 2004, according to market researcher IDC. The growth is tied to the explosion in e-business and the growing demand for continued professional development.
Upon the completion of the merger, E-Stamp shareholders will own approximately 50.1 percent of the new company, and Learn2 shareholders will own the remaining 49.9 percent. Initially, E-Stamp said, it will advance $2 million to Learn2, based in White Plains, N.Y.
Other financial details of the merger were not immediately available.
Learn2 Chief Executive Stephen Gott will be CEO of the merged company. E-Stamp Chief Executive Robert Ewald will assume the post of chairman.
E-Stamp said that before the deal's closing, it will explore options to move its customers to a third-party software provider.