SierraCities bought by VerticalNet, releases 3Q results

VerticalNet said Tuesday it will buy SierraCities for $133 million in stock. Separately, SierraCities released its third quarter earnings.

Share of the online business-to-business financing company were up 0.03 to 4.25. VerticalNet saw its shares slip 0.31 to 29.5.

The target company will be integrated into VerticalNet as VerticalNet Credit and be leveraged through the B2B firm's three business divisions, VerticalNet Markets, VerticalNet Solutions, and VerticalNet Exchanges.

The stock purchase will see VerticalNet pay $7 per SierraCities share, at a total market price of $133 million, payable in VerticalNet stock and subject to a collar provision. The number of VerticalNet shares transferred will be based on the average price of VerticalNet's stock over the ten trading days ending two days before the closing of the offer.

SierraCities has the right to terminate the merger agreement if the average price, after the collar provisions, is less than $15.

The merger is expected to be accretive to VerticalNet's 2001 cash earnings and 2001 revenues on a per share basis.

The deal is expected to commence no later than Nov. 17 and be completed by the end of the year.

Seperately, SierraCities released its third quarter results, posting with net income of $104,000, or 1 cent per basic and diluted share. Before non-cash goodwill amortization expense, net income was $643,000 for the quarter.

Revenue was $33.5 million compared to $27.2 million in the third quarter of 1999.