Given the number of Silicon Valley executives seeing their salaries cut recently, it may comfort s0me C-level leaders to know that at least one CEO, CyberSource’s William McKiernan, is getting a pretty fat raise.
According to a filing the company made Monday, the compensation committee of CyberSource’s board of directors pushed McKiernan’s pay up by $80,0000 to Read the rest of this entry »
CyberSource threw in the towel Wednesday on its efforts to establish a stake in the online-auction payment arena. In a press release Wednesday afternoon the company said it would close its wholly owned subsidiary BidPay.com, which it acquired in 2006, at the end of this month.The company expects to incur one-time charges totaling about $1.7 million to $2.7 million in the fourth quarter of 2007 related to the shutdown, of which up to $300,000 will impact the company’s future cash balance.
CyberSource bought BidPay.com in March 2006 from First Data, which shut the site down in December 2005 when it had 4 million registered users. The deal was valued at about $3 million, including cash outlays totaling nearly $2 million and assumption of tax liabilities. CyberSource relaunched the site three months later.
In its most recent financial filing, CyberSource reported that BidPay.com revenue totaled $120,000 and generated losses in its fiscal 2007 third quarter. That was down from $173,000 in sales in the fourth quarter of 2006, when it had 250,000 registered users.
CyberSource (ticker: CYBS), the Mountain View electronic payment systems company, learned a tricky lesson this year in the realm of mergers and acquisitions. Everyone knows there’s a ritual of give and take where each side tries to figure just how much it can squeeze and still get a deal. Well, CyberSource got squeezed.
Back in June, CyberSource announced it was paying $565 million in cash and stock for Authorize.net, another electronic payment company based in Marlborough, MA. In a proxy filed on Thursday, CyberSource disclosed the background of its merger talks.
In fact, CyberSource tried to buy Authorize.net back in 2004, but was outbid by Lightbridge. In April 2007, Lightbridge changed its name to Authorize.net. Back in June 2006, Authorize.net (then called Lightbridge) contacted CyberSource about a possible merger. In October 2006: CyberSource made its first tentative bid: about $12.50 per share.
No thanks, said Authorize.net, but let’s keep talking. And so they did. And in the meantime, up went Authorize.net’s stock price.
Discussions dragged on through the spring. And long story short, CyberSource eventually ended up agreeing to a deal worth $19.33 per share, using a mix of stock and $125 million in cash.
Winner: Authorize.net.
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