Court Approves Student Advantage, Inc. Purchase of CollegeClub.com, One of Nation’s Most Popular Community Web Sites
BOSTON and SAN DIEGO, Oct. 19 — A Federal Bankruptcy Court
today approved the sale of substantially all of the assets of CollegeClub.com,
Inc., including its popular Web site, CollegeClub.com, to Student Advantage,
Inc., the commerce connection for millions of college students and the
businesses and universities that serve them. The acquisition, first announced
August 22, is expected to be completed by October 30.
The court also confirmed the July 28 sale to Student Advantage of another
CollegeClub.com, Inc. subsidiary, eStudentLoan LLC, for approximately
$1 million. eStudentLoan will be combined with Student Advantage’s
Scholarship Search. Additionally, the court approved today the assignment to
Student Advantage of the multi-million dollar broadcast media agreement NBC
had with CollegeClub.com.
San Diego-based CollegeClub.com is the leading online integrated
communications and media Internet company for college students and is ranked
among the nation’s leading Web sites overall. CollegeClub.com has more than
3 million registered online members at 3,600 college and university campuses.
“The breadth and depth of CollegeClub’s daily interaction with the college
audience is unmatched. That strength, in combination with Student Advantage’s
superior proprietary content and commerce offerings will result in the most
comprehensive online destination for the higher education community, one that
is both powerful and resourceful,” Sozzi said. “This combination also creates
an offline and online powerhouse that will give our commerce and advertising
partners unmatched integrated sales and marketing opportunities.”
CollegeClub.com will retain its name and brand identity and operate as a
division of Student Advantage, Inc. It will also serve as the company’s
lifestyle and communications portal, according to Student Advantage Chairman
and Chief Executive Officer Raymond V. Sozzi Jr., while studentadvantage.com
will serve as the commerce connection linking students, businesses and
universities. Some of Student Advantage’s proprietary content and services
tools, such as Student Advantage’s Academic Research, Scholarship Search, and
U-Wire will be available to CollegeClub.com’s user base, becoming a potential
incremental revenue source for Student Advantage.
The company also said it expected to build on existing CollegeClub
partnerships, such as a multi-year marketing and promotions agreement with
General Motors; achieve significant cost savings in the College Club division
as a result of the already completed staff reductions of approximately
250 employees, the reduction or elimination of overlapping technology-related
expenses with Student Advantage, such as hosting fees, software licenses, ad
serving platforms, and database development and maintenance costs; and
stabilize product offerings and vendor relationships.
In addition to providing students with a valuable range of products and
services off- and online, Student Advantage also provides sophisticated
business-to-business marketing, technology licensing, and events and
promotions services, and supplies information services, Internet content and
data management services to colleges and universities.
The purchase price consists of approximately $7 million in cash and
1.4 million shares of Student Advantage common stock and the assumption of
certain liabilities. Up to an additional $5 million in cash will be paid to
College Club if certain Web site revenue performance goals are met during
2001. The company said in August that it had obtained a $10 million facility
from Fleet Bank.
Student Advantage did not purchase certain other College Club properties,
such as Versity.com and Izio.
David Wogahn, vice president of Student Advantage, has been named general
manager of College Club.com. Wogahn was the co-founder and chief operating
officer of University Netcasting and joined Student Advantage when it acquired
his firm, now the FANSonly Network, in June 1999.
About Student Advantage
Student Advantage, Inc. (Nasdaq: STAD) is the commerce connection for
millions of college students and the businesses and universities that serve
them, and provides each with a valuable range of products and services.
Student Advantage reaches students online and offline through its award-
winning Web site, http://www.studentadvantage.com, and Student Advantage Membership
Program, provides sophisticated business-to-business marketing and events and
promotion services, and supplies information services, Internet content and
data management services to colleges and universities.
Student Advantage has proprietary commerce relationships with nearly 50
national retailers and businesses, including AT&T, Amtrak, Staples,
Textbooks.com and Tower Records, and 15,000 local participating locations in
125 cities throughout the country. The company has relationships with nearly
1,000 of America’s leading colleges and universities.
This announcement contains forward-looking statements which are based on
current expectations and involve a number of risks and uncertainties. There
are a number of important factors that could cause the actual results of the
CollegeClub acquisition to differ materially from those expressed in the
forward-looking statements made by Student Advantage. Investors are directed
to consider the risks of acquiring and integrating the assets of new
businesses, of raising revenue on the Internet, particularly on community
sites, doing business on the Internet, the volatility of Internet stocks in
general, the cyclical nature of Student Advantage’s business and other risks
and uncertainties discussed in documents filed by Student Advantage with the
Securities and Exchange Commission including, without limitation, under “Risk
Factors” set forth in Student Advantage’s Form 10-Q and other periodic
reports. We undertake no obligation to publicly release the result of any
revisions to these forward-looking statements, which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of