Dow Jones has signed a definitive agreement to acquire MarketWatch, a provider of online business news, financial information and analytical tools, in an all-cash transaction valued at approximately $519 million.
Dow Jones has agreed to pay $18 per fully diluted common share of MarketWatch, outbidding offers from Yahoo, Viacom and The New York Times.
Founded in 1997, MarketWatch operates two Web sites - MarketWatch.com and BigCharts.com - which serve eight million unique visitors per month. By combining the traffic of the Wall Street Journal network of sites and MarketWatch, Dow Jones sites will have more than nine million visitors per month.
Following the acquisition, MarketWatch will be integrated with the Dow Jones Consumer Electronic Publishing business. Dow Jones says the merger will reduce its costs by $12 million due to the elimination of royalty fees and reduction of other overheads.
Richard Zannino, EVP and COO, Dow Jones, says the acquisition will extend the company's reach into a broader and larger audience for online business and financial news.
"It will increase our revenue and earnings growth by enabling us to participate more fully in the rapidly growing market for online advertising," he says.
The acquisition, which is subject to customary regulatory approvals and the approval of MarketWatch shareholders, is expected to be completed in the first quarter of 2005.