SANTA MONICA, Calif. -- Drkoop.com Inc. agreed to acquire home-infusion-service provider IVonyx for $7.1 million in cash and stock.
Drkoop.com (KOOP) said the deal will expand its health and wellness offerings into the home-therapy segment. Upon completion of the transaction, Drkoop.com President Ed Cespedes will become vice chairman of the company's board and Ivonyx Chief Executive Peter Molloy will become president of Drkoop.com.
Drkoop.com has shifted its business focus and sharply cut costs since this past summer, when the company found a new source of financing just in time to avoid shutting its cash-starved operations. The investor group included venture capitalists who then took control of the company's management. The company recently moved its headquarters and cut 45 more jobs.
Richard Rosenblatt, CEO of Drkoop.com, said the Ivonyx acquisition is expected to add more than $30 million in annual revenue. He said that Mr. Cespedes will continue as an "active member" of the company as vice chairman and will lead its mergers and acquisitions activity and integration of deals. Mr. Rosenblatt will continue as CEO and join C. Everett Koop as co-chairman of Drkoop.com's board.
The acquisition is structured as a sale of assets of IVonyx. The consideration to be paid for IVonyx consists of $3 million in cash and $4.1 million of Drkoop.com common stock, subject to adjustment under certain circumstances. Also, a payment of $1 million will be due if IVonyx's net income for the first 12-month period following the closing exceeds $3 million.
Separately, Drkoop.com announced that its board approved a reverse stock split in order for the company to attain compliance with Nasdaq's $1 minimum bid-price requirement. The reverse stock split is subject to shareholder approval.
The company isn't currently in compliance with the $1.00 minimum bid-price requirement, and a hearing before a Nasdaq Listing Qualifications Panel was held on March 30, 2001, to review the Nasdaq staff's ruling that the company's common stock is subject to delisting from Nasdaq. The delisting of the company's common stock has been stayed pending the outcome of the hearing.
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