Intelidata Technologies Corp. and Home Financial Network, Inc. have called off the merger deal they announced April 19.
The merger, which would have combined the front- and back-end Internet banking systems of both companies, proved impractical, said Daniel M. Schley, chairman and chief executive officer of Westport-based HFN.
The charge for goodwill would have approached $100 million-an "enormous" sum that would have eliminated any chances for profitability in the near term, he said.
In addition, lawyers hired to proceed with the transaction concluded it would have been highly scrutinized by the Securities and Exchange Commission and Nasdaq, and would have taken at least seven months to close, he said.
"The idea of being sucked in and sucked down by regulatory issues, by SEC issues and, quite honestly, putting our company in a state of purgatory for seven months was just unacceptable," Mr. Schley said.
Intelidata, based in Reston, Va., and HFN will proceed to integrate their products, and jointly market and sell them, through a joint venture called InterposeConnect. The joint venture is subject to a definitive agreement.
Intelidata lost $1.5 million during the first quarter of 1999. Revenues were $2.1 million.
"Clearly, my preference would have been to complete the due diligence and come to a conclusion, and not draw the market into this as deeply as we have, and I regret that," Mr. Schley said.
