Penthouse International has finished the sale of adult Internet payment processors Internet Billing (iBill) and Media Billing to Care Concepts I, the company announced August 31. The deal brought Penthouse about $55 million in stock, $22 million more than the value of the deal when Penthouse bought iBill in March.
"We believe we made a sound investment in March and an even more advantageous disposition in August, rewarding us with a significant gain in less than six months," Penthouse executive vice president Claude Bertin said in a statement. "We are pleased to have completed the sale and to be able to focus on preserving our rights as sole shareholder in the General Media bankruptcy case. Penthouse believes that we have substantial remedies available to us against the Bell/Staton Group and we intend to pursue them no matter how long it takes."
The final sale deal means Penthouse will own, initially, about 19.9 percent of Care Concepts common stock, with the percentage of fully-diluted Care Concepts common shares into which Care Concepts Series D Preferred stock can be converted depending on iBill's cash flow for fiscal years 2004 and 2005.
Penthouse said they have representation on the Care Concepts board of directors and will hold the Care Concepts stock for investment purposes, expecting long-term appreciation. The deal includes an amendment that, in the event of a difference of over ten percent between iBill shareholder equity shown in unaudited financial statements against those shown in financial statements that are audited, Care Concepts can rescind the deal.
Penthouse was granted representation on the Care Concepts board of directors, and, as a significant shareholder, will hold the Care Concepts stock for investment purposes and expects long-term appreciation.
Penthouse delivered unaudited financial statements of iBill to Care Concepts in connection with the transaction. According to an amendment in the deal, in the event that there is a difference of more than ten percent between the iBill shareholder equity presented in the unaudited financial statements versus the audited financial statements, Care Concepts has the option to rescind the transaction, Penthouse said.
Care Concepts originally announced in late July that they would buy iBill. "With the acquisition of iBill providing added flexibility and synergy to our auction operations, we will continue to expand efficiencies between our radio and online auction site," said Care Concepts president Gary Spaniak, Jr. at the time. "Similar to the combination of PayPal and eBay, the acquisition of iBill provides our auction operations with an exciting strategic solution to vertically integrate online payment services into an auction environment."
IBill said at that time they believed the sale to Care Concepts would benefit the company and its existing clients. "The full stock market listing enhances iBill's business strategy by offering greater access to the capital markets as we continue to grow with our clients," said senior vice president Cathy Beardsley when the deal was first announced. "This transaction is a win-win for iBill and Care Concepts, and our respective customers."
IBill isn't just for adult Internet entertainment anymore, either, used more and more by online buyers for products and services like downloadable music, dating and personals sites, health and travel, multiplayer video games, and more, through such familiar brands as Match.com, eDiets.com, Watchers International, SportsLine.com, Hotels.com, and Rooms.com.
