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Net payment firm to buy competitor; stock surges

Shares of CyberCash rise 20 percent after the company says it will buy privately held Network 1 Financial in a stock deal.

Shares of Internet payment services company CyberCash were up 20 percent Thursday after the company said it will buy privately held Network 1 Financial in a stock deal.

CyberCash stock was up 34 cents to $2.06 in afternoon trading on the Nasdaq.

The merged company, which will retain the CyberCash name, will combine the electronic payment capabilities of both companies, for both online and offline customers. Business-to-business initiatives will also be included.

The combined companies should report annual revenue of more than $100 million in the first 12 months, said Reston, Va.-based CyberCash, which expects to have positive cash flow in the third quarter of 2001.

The two companies reported more than $3 billion in transactions between them. Network 1, based in McClean, Va., expects more than $24 million in revenue this year.

Under the terms of the agreement, shareholders of Network 1 will receive CyberCash shares representing 50 percent of the equity of the merged company on a fully diluted basis.

William G. Wade, chief executive of Network 1, will fulfill the same role with the combined company once the transaction is completed. CyberCash chief financial officer John H. Karnes will assume the new CFO position.