SACRAMENTO, CA--(Marketwire -10/10/11)- As previously disclosed today, InsWeb Corporation (NASDAQ: INSW - News) has entered into a definitive agreement to sell substantially all of its assets relating to its insurance lead generation and marketing business to Bankrate, Inc. (NYSE: RATE - News) for $65 million in cash at closing, subject to a working capital adjustment specified in the agreement. Under the terms of the agreement, Bankrate will also assume certain liabilities of InsWeb. Following the closing, InsWeb will retain a portfolio of e-commerce and online insurance distribution patents, intends to focus its efforts on licensing its patent portfolio, and is expected to continue as a public company. Since its founding in 1995, InsWeb has developed multiple proprietary e-commerce and online insurance distribution technologies and owns five issued patents and two patent applications.
"This transaction provides an attractive opportunity to exit the lead generation business and to shift our focus to monetizing our patent portfolio, which we believe comprises valuable technologies for a wide range of e-commerce companies. Following the close of this transaction, InsWeb will have growth opportunities stemming from our patent portfolio, and a continuing commitment to deliver value to our shareholders," said Hussein Enan, Chairman and CEO of InsWeb.
Stockholders who own shares of the Company's common stock immediately prior to the closing of the asset sale transaction will continue to hold the same number of shares immediately following the closing. The Company, and not its stockholders, will receive all of the net proceeds from the asset sale transaction. Following the transaction, the net proceeds from the transaction, combined with approximately $6 million in cash from current operations that will remain with the Company, are expected to provide ample capital for future operations. The Company anticipates using a portion of the net proceeds for general working capital purposes in connection with the development and operation of the patent licensing business. In addition, the Company expects to use a substantial portion of the net proceeds from the asset sale transaction to make a special cash distribution to its stockholders in the first quarter of 2012. The Company expects that to the extent the sale of assets results in the recognition of a net gain for tax purposes, the Company's available net operating loss carryforwards will offset a substantial part of such gain. The Company expects to lower its overhead costs commensurate with the reduced scope of operations. The Company and its ongoing business will operate under a new name, to be approved by stockholders, and will continue to be headquartered in Sacramento, CA.
Additional Information and Where to Find It
InsWeb plans to file a proxy statement with the United States Securities and Exchange Commission (the "SEC") regarding the proposed transaction. INVESTORS ARE URGED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. You will be able to obtain the proxy statement, as well as other filings containing information about InsWeb, free of charge, at the website maintained by the SEC at www.sec.gov. Copies of the proxy statement and the filings with the SEC that will be incorporated by reference in the proxy statement can also be obtained, free of charge, by directing a request to InsWeb at 10850 Gold Center Dr., Suite 250, Rancho Cordova, CA 95670, Attention: General Counsel. The directors and executive officers of InsWeb and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding InsWeb directors and executive officers is available in its proxy statement filed with the SEC by InsWeb on June 7, 2011. These documents can be obtained free of charge from the sources indicated above. Other information regarding the interests of the participants in the proxy solicitation will be included in the proxy statement and other relevant materials to be filed with the SEC when they become available.
InsWeb Corporation (NASDAQ: INSW - News) owns and operates a network of leading insurance marketplace and education websites. Founded in 1995 and headquartered in Sacramento, California, InsWeb's primary properties include InsWeb.com, InsuranceRates.com, LocalInsuranceAgents.com, MedHealthInsurance.com and AgentInsider.com. InsWeb has invented multiple e-commerce and online insurance distribution technologies and owns the following patents: 6,898,597; 7,107,325; 7,389,246; 7,640,176 and 7,707,505.
This news release contains forward-looking statements, which include statements expressing the intent, belief or current expectations of InsWeb that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. The words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "target," "goal," and similar expressions are intended to identify forward-looking statements. Actual results might differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with the transaction and InsWeb's business, which include, but are not limited to: macroeconomic conditions and general industry conditions such as the competitive environment; regulatory and litigation matters and risks; risks related to whether stockholders will approve the transaction; the possibility that competing offers for the assets will be made; the risk that a condition to closing of the transaction may not be satisfied; other risks to consummation of the transaction, including the risk that the transaction will not be consummated within the expected time period; the effects of disruption from the transaction making it more difficult to maintain relationships with employees, customers, suppliers and other business partners; risks related to InsWeb's ability to operate its retained business, including realizing the value of its retained assets and satisfying its retained liabilities and obligations; the risk that we are not currently engaged in the patent licensing business, and the assets that comprise the retained business have never generated revenues; and the factors discussed in InsWeb's annual report on Form 10-K for the year ended December 31, 2010 filed with the SEC. Unless legally required, InsWeb undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
"INSWEB" and "AGENTINSIDER" are registered service marks of InsWeb Corporation. All marks above are those of InsWeb Corporation, except for those of insurance insurers, brokers, agents, industry organizations, financial institutions, online partners, service providers, other mentioned companies and educational institutions, which are the marks of their respective entities.