Answers Corp. isn’t throwing in the towel on its attempted $100 million acquisition of Dictionary.com parent Lexico. Since the deal was announced last summer, there have been doubts about the company’s ability to raise the money and get the deal done. In November, the company said it had extended the deal deadline, as it didn’t appear the financing would materialize in time. After originally filing to raise up to $140 million in stock and various instruments, the company is again attempting to raise the cash — this time it’s a $100 million stock sale to institutional investors. Underwriters include Thomas Weisel Partners, Canaccord Adams, Maxim Group, ThinkEquity Partners, and Stifel Nicolaus. More details in the full prospectus.
In addition to the stock sale, Answers Corp (NSDQ: ANSW). announced the sale of $8.5 million in convertible debt, carrying an 8 percent interest rate, to help fund the acquisition. With that announcement, the company said it has modified its Lexico purchase agreement to establish a 24-month, $10 million holdback period. (Release)
Separately, Answers.com and Lexico have both provided updated financial data. Answers Corp. expects Q4 revenue of $2.95-$2.98 million, 17 percent higher than the same quarter last year. Also, the company said it expects the Lexico deal to be completed in February. Release. Lexico, meanwhile, expects Q4 revenue of $3.1-$3.4 million, over 50 percent higher than the $2.0 million in last year’s quarter. Release.