MindArrow to Acquire Competitor Radical

MindArrow Systems Inc., the Aliso Viejo e-mail marketing firm that was rocked by a counterfeit-stock fraud, today will announce the acquisition of privately held competitor Radical Communications Inc. of Marina del Rey for stock.

MindArrow will provide 2 million shares of common stock worth about $2 million and 135,000 shares of preferred stock for Radical, along with a note promising to pay $500,000 at the end of next year and $500,000 the following year.

Both e-commerce companies have struggled, but MindArrow Chief Executive Robert Webber said their client bases and technologies have little overlap, giving them a better shot at profitability as a combination.

MindArrow shares closed at $1.03, down 1 cent, on Nasdaq.

Radical is headed by former Mattel Inc. executive Bruce Stein, who will step down as an executive but might take a seat on MindArrow’s board, Webber said.

MindArrow’s former stock transfer agent and an accomplice pleaded guilty in June to issuing 1.1 million unauthorized shares, a scam that caused Nasdaq to suspend trading in the company for three months this year. No MindArrow insiders have been implicated.