aQuantive $70 million convertible talked at 2.0%-2.5% yield, up 42.5%-47.5%

By Ronda Fears

Nashville, Aug. 18 - aQuantive Inc. launched $70 million of 20-year convertible notes talked to yield 2.0% to 2.5% with a 42.5% to 47.5% initial conversion premium.

Thomas Weisel Partners is sole bookrunner of the Rule 144A deal, which is scheduled to price after Thursday's close.

The senior unsecured notes will be non-callable for five years with puts in years five, 10 and 15.

There is dividend protection and takeover protection, both by means of a conversion ratio adjustment.

The Seattle-based digital marketing and interactive advertising firm said proceeds would be used to redeem the convertible notes issued in conjunction with its recent acquisition of SBI.Razorfish - an internet marketing and consulting firm - and for general corporate purposes.

aQuantive closed the $160 million purchase in July, financing it with $85 million in cash and $75 million in convertible notes. The company said the acquisition is expected to contribute $41 million to $43 million in revenue and $3 million to $4 million in EBITDA during the balance of 2004.

Earlier this month, aQuantive reported second-quarter net income of $7.5 million, or 11 cents per diluted share, up from $2.4 million, or 3 cents per diluted share, in second quarter 2003. Revenues grew to $27.8 million from $15.2 million for the quarter, and EBITDA rose to $8.9 million from $3.1 million.

For third quarter, the company expects revenue of $44 million to $46 million, diluted earnings per share of 3 to 5 cents and EBITDA of 11 to 13 cents per diluted share. For fourth quarter, the company projects revenue of $54 million to $58 million, diluted EPS of 4 to 6 cents and EBITDA of 14 to 17 cents per diluted share.

For 2004, the company forecasts revenue of $148 million to $155 million, diluted EPS of 24 to 28 cents and EBITDA of 45 to 50 cents per diluted share.

aQuantive shares closed Wednesday up 10 cents, or 1.09%, to $9.25.

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