Cmgi (MM) (NASDAQ:CMGI)
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CMGI®, Inc. (NASDAQ:
CMGI), a global leader in supply chain management services, today
announced it has acquired PTS Electronics (PTS), one of the largest
independent consumer-electronics service repair and reverse logistics
providers. The all cash transaction is valued at approximately $45
million. The transaction is expected to be cash flow positive, but
neutral to earnings in fiscal 2008, and accretive to earnings in fiscal
2009 through a combination of planned revenue growth and operational
synergies.
PTS is one of the nation's largest remanufacturers of wireless and
cellular phone products, and the largest single source for
remanufactured HDTV and digital main boards and tuners. The variety of
consumer electronics service solutions offered by PTS will create a
strategic extension of the end-to-end supply chain solutions offered
through ModusLink, CMGI’s supply chain
services business, enabling a more robust reverse logistics solution for
high-tech clients. PTS’ capabilities add to
ModusLink’s current reverse logistics services
that include service parts management, contact center support, asset
disposition channels and Level 1 repair. The PTS acquisition will also
tightly integrate reverse and forward logistics operations, enabling a
more effective global supply chain service for ModusLink clients.
“The long-term demand for high-tech consumer
electronics continues to grow, especially for high-value, wireless
communication devices,” said Joseph C. Lawler,
chairman, president and chief executive officer of CMGI. “As
more consumer electronics products proliferate in the market and
features continue to merge into a single device, there is an increasing
need to both accelerate and improve the value recovery from the returns
process. And fast, reliable, economical service is essential. By
acquiring PTS, we will be positioned to meet our clients complete
reverse logistics needs. We view the aftermarket services space as a
source of potential revenue and earnings growth in the future, and
expect PTS to form the cornerstone of that service offering.”
“We have built our business on strong
partnerships with the goal of continually exceeding customer
expectations,” said Jack D. Craig, chief
executive officer of PTS. “Rapid
time-to-market requirements, low-cost strategies and short product
lifecycles demand that manufacturers have a highly responsive and
tightly integrated supply chain, which we will now be able to offer as
part of ModusLink’s end-to-end supply chain
solutions.”
With four facilities in Bloomington and Indianapolis, Indiana, PTS has
approximately 500 technical and support staff. Based on unaudited
financial statements, the PTS business generated 2007 revenue of
approximately $37.4 million.
About CMGI
CMGI, Inc. (NASDAQ: CMGI), through its subsidiaries ModusLink, Open
Channel Solutions and PTS Electronics, provides industry-leading global
supply chain management services and solutions that help businesses
market, sell and distribute their products around the world. In
addition, CMGI’s venture capital business,
@Ventures, invests in a variety of technology ventures. For additional
information, visit www.cmgi.com.
About ModusLink
ModusLink Corporation is a leading provider of global, end-to-end supply
chain management solutions. The company provides technology clients in
the software, computing, consumer electronics, storage and
communications markets with customized supply chain solutions that
improve time-to-market, productivity and customer satisfaction while
reducing risk and cost. ModusLink's services include consulting and
planning, sourcing and supply base management, manufacturing and product
configuration, fulfillment, logistics management, e-commerce and the
complete range of aftermarket services. ModusLink has more than 30
facilities in 13 countries, creating the largest global footprint in the
industry. With headquarters in Waltham, Massachusetts, the company is a
subsidiary of CMGI, Inc. (NASDAQ: CMGI). For additional information,
visit www.moduslink.com.
About PTS Electronics
PTS Electronics (PTS) is one of the largest consumer-electronics service
repair and reverse logistics providers, and the largest single source
for remanufactured HDTV and digital main boards and tuners. The company
also services CATV converters, set-top controls and automotive audio and
telematic systems. With more than 30 years of experience in the
electronics industry, a strong backbone of technical manpower and
state-of-the-art equipment, PTS provides unparalleled service solutions
and component-level rebuilds. The company maintains more than 300 test
stations for live air testing of all television products and has more
than 50,000 parts in stock for daily rebuild demand. With headquarters
in Bloomington, Indiana, PTS serves more than 20,000 customers
nationwide, including independent service dealers, national retail
chains, general line distributors, third party maintenance companies and
major corporations. PTS is a subsidiary of CMGI, Inc. (NASDAQ: CMGI).
For additional information, visit www.ptscorp.com.
This release contains forward-looking statements, which address a
variety of subjects including, for example, the expected benefits of the
transaction, the expected financial contribution of PTS and the
expansion of capabilities expected to occur as a result of the
transaction. The following important factors and uncertainties, among
others, could cause actual results to differ materially from those
described in these forward-looking statements: There can be no assurance
that projected financial results will be attained; There can be no
assurance that other suitable acquisitions will be identified or
available on terms acceptable to CMGI; CMGI's success depends on its
ability to execute on its business strategy and the continued and
increased demand for and market acceptance of its solutions and
services; CMGI may not be able to expand its operations in accordance
with its business strategy; CMGI may experience difficulties integrating
technologies, operations and personnel in accordance with its business
strategy; CMGI derives a significant portion of its revenue from a small
number of customers and the loss of any of those customers would
significantly damage its financial condition and results of operations;
increased competition and technological changes in the markets in which
CMGI competes; and risks associated with international operations.
ModusLink represents a significant percentage of CMGI's operations and
the occurrence of any of the foregoing factors with respect to ModusLink’s
business may have an adverse effect on CMGI’s
results of operations and financial results. For a detailed
discussion of cautionary statements that may affect CMGI's future
results of operations and financial results, please refer to CMGI's
filings with the Securities and Exchange Commission, including CMGI's
most recent Annual Report on Form 10-K and Quarterly Report on
Form 10-Q. Forward-looking statements represent management's current
expectations and are inherently uncertain. We do not undertake any
obligation to update forward-looking statements made by us.
CMGI is a registered trademark of CMGI, Inc. and ModusLink is a
registered trademark of ModusLink Corporation. All other company
names and products are trademarks or registered trademarks of their
respective companies.