EDGAR Online, Inc. (NASDAQ: EDGR) and Ubmatrix Inc. have announced their plan to merge in an all equity transaction. New York-based EDGAR Online, Inc. (NASDAQ:EDGR) and Redwood City-based UBmatrix said the merger will create the first "global end-to-end provider of solutions for the creation, validation and analysis of XBRL (eXtensible Business Reporting Language) content." EDGAR Online is currently trading at $1.41, up $.11 or 8.46% based on today's news.
UBmatrix is one of the original inventors of the XBRL financial standard, which is being mandated worldwide by many regulators to improve the transparency and efficiency of business reporting. The merger would combine Edgar Online's position as the leading provider of U.S. Securities and Exchange Commission public company XBRL filings and XBRL data, and UBmatrix's experience as an XBRL software provider to independent software vendors and major U.S. and international regulators.
The merger will be an all equity transaction with the issuance by Edgar Online of preferred and common shares equal to approximately 16 percent of the company's common stock. Currently UBmatrix has $1.8 million of cash on its balance sheet, and will be required to satisfy all indebtedness by the closing. In addition to the merger consideration, current UBmatrix shareholders have agreed to invest an additional $2 million in cash into the company through the purchase of additional Edgar Online preferred shares.
"Creating a single comprehensive source for XBRL solutions in support of financial transparency will accelerate the market for this information exchange standard," said Sunir Kapoor, president and CEO of UBmatrix. "Just as important, we believe that we will have the broadest and strongest network of partners in the industry. We expect this to ease adoption of the XBRL standard for organizations across the global financial information supply chain - from corporate filers and regulators to financial data providers and investors."
Under the terms of the agreement, UBmatrix will become a wholly-owned subsidiary of Edgar Online. It is expected to initially operate as a standalone unit of the combined company, using its existing brand and under the leadership of Kapoor, who will serve as president of the unit. Barry Schuler, a director on the board of UBmatrix and former chairman and CEO of America Online Inc., will join the board of Edgar Online at closing.
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