APBNews Sold To Consulting Site
Sep. 07, 2000
NEW YORK (AP) _ SafetyTips.com, a safety issues Web site, agreed Thursday to buy the struggling crime news provider APBNews.com for $575,000, far less than the company had offered to pay just two weeks ago.
Yovette Mumford, CEO of SafetyTips.com, said she plans to keep APBNews operating as a separate site. The material will remain mainly the same, with some additional content on safety issues in the construction industry and environmental issues.
SafetyTips also plans to use content from APBNews in its own site and in safety consulting materials it sells to its own clients, which include companies and municipal governments.
On Aug. 24 SafetyTips had offered to pay $950,000 for APBNews, but the company withdrew the offer shortly thereafter. Mumford said SafetyTips had been rushed by court deadlines at the time and hadn't completed its review of APBNews' assets.
The deal, reached at a bankruptcy court in New York, came just hours after a mysterious bidder withdrew a higher offer, leaving SafetyTips as the only bidder for APBNews's assets.
APBNews CEO Mark Sauter called the sale a ``bittersweet'' moment for the site's staff and said he regretted not being able to secure a higher price for the company, which investors had valued as high as $104 million last summer.
``I never realized how dramatic bankruptcy court could be,'' Sauter said. ``It's been quite a ride _ in the wrong direction.''
APBNews garnered numerous accolades and awards in the 18 months since it was founded, but it fell on hard times this spring when it failed to close its third round of financing.
The company fired nearly all its staff in early June and declared bankruptcy a month later, having burned through $27 million in cash and leaving behind $8 million in debt. The site has continued to operate on a skeleton staff since then.
The company blamed a sharp downturn in investor enthusiasm for Internet companies focused primarily on providing news and other content. APBNews is privately held, but the shares of public content providers such as Salon.com and TheStreet.com have languished badly in recent months.
The fate of APBNews' current management and 18 employees remains unclear. Mumford said all employees will have to reapply for their jobs, but she said she plans to eventually expand the staff and build up its offerings.
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