American Greetings said Thursday it would pay $US35 million in cash to acquire Blue Mountain Arts, the electronic greeting card arm of Internet access company At Home.
The acquisition comes less than two years after At Home, which does business as Excite@Home, spent a whopping $780 million in cash and stock to buy Blue Mountain at the height of the dot-com boom.
American Greetings will add its former rival to its family of online greeting card providers, which include AmericanGreetings.com, Egreetings.com and BeatGreets.com. The electronic greeting card powerhouse spent $28.6 million to acquire the latter two Web properties in February of this year.
American Greetings said it did not expect the acquisition to hinder its earlier plans of taking its online unit to profitability in the fourth quarter of the calendar year. The company also said the acquisition would boost its 2002 profits, as the new unit will bolster electronic commerce sales and marketing revenue.
Excite@Home said it was selling the electronic card unit in an effort to slim down its business to focus on broadband and control its operating costs. The company has been struggling financially in recent months. Its chief financial officer resigned Tuesday and it is suffering from a debt that has reached about $1 billion.
Under terms of the deal, American Greetings said that Blue Mountain would continue to provide its electronic greeting cards on Excite@Home's network of Web sites for the next three years. Also, Excite@Home said it will buy about $3 million in advertising on the AmericanGreetings.com and BlueMountain.com Web sites.