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Acquisitions spark VerticalNet shares

Shares of VerticalNet Inc. (Nasdaq: VERT) stormed up 13, or 12 percent, to 118 Thursday after announcing it acquired three new Web site communities.

The new sites are TechSpex, for the machine tools industry; ElectricNet, for electrical power industry professionals; and Oil-Link, for members of the oil and gas industry.

"In 0 to 60 days we can eliminate their technology and give them a VerticalNet makeover," said Mike Hagan, co-founder and senior vice president of mergers and acquisitions. "We can ramp up quicker with their installed base."

Hagan noted that the trio of companies bring in new buyers, advertising clients and 100s of e-commerce relationships.

The company did not disclose the terms of the acquisitions.

Last quarter, Vertical net reported a loss of $5.6 million, or 39 cents a share, on sales of $1.9 million.

First Call consensus expects it to lose 36 cents a share in its second quarter and $1.41 a share in the fiscal year.

Hagan said the three acquisitions will be accretive to earnings. He said VerticalNet can use its high-flying stock to buy smaller competitors at reasonable prices, four to five times revenue.

After its spectacular initial public offering in February, VerticalNet shares moved up to an all-time high of 149 in April. By June, the stock was trading at 34 3/4.

All six analysts following the stock maintain either a "buy" or "strong buy" recommendation.

Larry Dignan contributed to this report.