Intuit Inc. (NASDAQ: INTU), a leading provider of financial management solutions to small businesses and consumers, today announced it has completed the sale of selected assets of its QuickenInsuranceSM business to InsWeb Corp. (NASDAQ: INSW).
Intuit has received a 16.6 percent equity stake in InsWeb, valued at approximately $11.4 million, based on the closing price of InsWeb's stock yesterday. Intuit and InsWeb also signed a separate agreement that makes InsWeb the exclusive consumer insurance aggregator for Intuit's Quicken.com© and QuickenInsurance Web sites and certain consumer desktop products. In exchange, Intuit will share in associated revenues, which are subject to certain minimums. Intuit and InsWeb announced they had reached agreement for these transactions on Nov. 27, 2000.
As publicly stated earlier, Intuit expects no material impact from this transaction on its fiscal year 2001 revenue. Intuit expects this transaction will generate an improvement in pro forma operating income between $3 million and $5 million, distributed approximately evenly between Intuit's third and fourth fiscal quarter results. Intuit expects costs associated with the transaction to be approximately $10 million. These one-time costs will not be reflected in Intuit's pro forma operating results.
"We think these agreements are a win for both Intuit and InsWeb - and we think Intuit's customers will benefit with InsWeb's solutions," said Steve Bennett, Intuit's president and chief executive officer, who is expected to be appointed to the InsWeb Board of Directors. In connection with the receipt of its equity stake in InsWeb, Intuit has agreed to certain conditions, including restrictions reselling such shares for a period of at least 18 months, voting the shares and acquiring additional shares.
