Perion merging with Conduit's toolbar unit, shares fall

The all-stock transaction will give Conduit shareholders 81% of the new company, and Perion (PERI) shareholders 19%. It's expected to close in January '14, provided Period shareholders vote for the deal in November. (PR)

Rumors about a deal have been around for a while; Perion investors were apparently hoping for a better valuation. PERI -7.4% premarket.

For the 12 months ending June 30, Perion and Conduit's toolbar unit (Client Connect) had combined revenue of $367.2M, of which 24% came from Perion's e-mail, imaging, and IM apps. Combined net income was $92.5M, of which Perion accounted for 17%.

Both companies depend on deals with search engines to monetize their apps/services. Perion and Conduit assert the deal will yield "a top-three search distribution company responsible for over 2% of searches in the U.S.," and also provide other ad deal synergies.

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