Troubled Firm ‘Back in Business’ With Deal
Taking another step toward recovery from a counterfeit-stock debacle, online marketer MindArrow Systems Inc. said Monday it has agreed to acquire Control Commerce Inc., whose technology makes it easier to purchase goods over the Internet.
MindArrow, which is based in Aliso Viejo, would issue stock to acquire privately held Control Commerce in New York. Financial details were not disclosed.
The Nasdaq Stock Market froze trading in MindArrow shares for three months after the company disclosed in February that its former stock transfer agent had issued 1.1 million shares without the company’s approval. As a result, MindArrow canceled plans to acquire Irish communications company Twelve Horses Ltd. in a stock swap.
Along with resumption of trading on the Nasdaq SmallCap Market this month, the Control Commerce deal signals “we’re back in business,” MindArrow Chief Executive Rob Webber said.
MindArrow shares rose 25 cents to close at $1.83.
Control Commerce investors include William E. Simon & Sons, an investment firm run by sons of the former U.S. Treasury secretary, and MacAndrews & Forbes Holdings Inc., an investment company controlled by billionaire Ronald O. Perelman.
Control Commerce has $1 million in cash that would boost MindArrow’s reserves to $4 million as it strives to become profitable by the end of the year.
MindArrow creates e-mail attachments that display video without the need for special programs, sending detailed information about customers back to advertisers.
Control Commerce’s software would allow users of MindArrow brochures to buy products with two or three clicks of a mouse instead of having to click eight or nine times and go to a separate Web site. For every additional mouse click, about 15% of the potential buyers give up on making a purchase, said Control Commerce CEO Jim Chard.
