Netguru (NASDAQ:NGRU)
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From May 2019 to May 2024
Privately held BPO Management Services, Inc. (BPOMS)
entered into a definitive agreement to merge with publicly held
netGuru, Inc. (netGuru) (Nasdaq:NGRU), a provider of document
management software and outsourced information technology (IT)
services.
The transaction involves a reverse merger in which BPOMS would
emerge as the surviving public entity, and the U.S.-based business of
netGuru would be integrated into BPOMS to provide customers of both
companies with a broader service offering from which to fulfill their
back-office outsourcing needs. In a simultaneous transaction the
Indian operations of netGuru will be divested, and BPOMS will enter
into a support agreement with the India-based company in order to
offer its customers the economic efficiencies and technology expertise
inherent with offshore service providers.
BPOMS, a Delaware corporation founded in July 2005, offers a wide
range of BPO-on-demand services, including human resources (HRO),
information technology (ITO), enterprise content management (ECM), and
finance and accounting to support the back-office functions of
middle-market enterprises.
The merger with netGuru would add key document management and
information technology services that would be integrated into BPOMS's
operations and further enhance BPOMS's existing services and
capabilities. Headquarters for the merged companies are planned for
Yorba Linda, California, and would complement existing BPOMS
operations in San Francisco; Branchburg, New Jersey; and the Canadian
cities of Winnipeg, Regina, and Toronto. These offices would be joined
by netGuru offices located in Boston and Wurzburg, Germany, to provide
access to both the North American and European marketplace.
BPOMS Chief Executive Patrick Dolan commented: "Our merger with
netGuru represents a key step in our broader plan to offer a
comprehensive set of cost-competitive back-office outsourcing services
to the thousands of companies in the underserved middle market.
Middle-market companies understand the significant benefits of BPO and
potential cost savings that an experienced service provider offers.
But the problem lies in the absence of experienced and suitably scaled
providers who are capable of efficiently serving that market;
therefore, demand by middle-market companies for BPO services is
clearly not being met.
"Traditionally, comprehensive back-office BPO services have been
available only through large-scale Tier-1 providers such as IBM, ACS,
Accenture, and EDS, and offered almost exclusively to Fortune 500
companies because of their large size and commensurate budgets," Dolan
continued. "In contrast, the service-provider landscape for
middle-market companies is highly fragmented with no clear leader.
With this merger and other strategic acquisitions being planned, BPOMS
expects to become the leader in the middle market by offering the same
comprehensive back-office services to mid-sized companies at lower
cost compared to the larger and higher-priced Tier-1 providers. In
addition, because of our lower-cost structure, we intend to offer
selective outsourcing services to Fortune 500 companies for those
functions which are not being cost-effectively met by their primary
Tier-1 providers.
"Financially, this merger provides BPOMS with access to public
capital markets and enhanced opportunities to achieve substantial
revenue growth and correspondingly higher shareholder value," Dolan
added. "Demand for business process outsourcing services, especially
those related to noncore competencies such as human resources, IT, and
related functions, is rising and presents significant growth
opportunities.
"From an investment standpoint, high customer contract renewal
rates and therefore recurring customer revenue have proven to be
important contributors to creating higher market valuations for BPO
service providers," Dolan stated. "In addition, BPOMS will pursue key
public-company advantages for our stockholders, including share
liquidity and higher, peer-comparable market valuation."
The proposed merger has been approved by BPOMS and is subject to
approval by netGuru shareholders. For additional information and terms
of the proposed merger, refer to netGuru's announcement on August 30,
2006, at http://www.netguru.com/press/PR-083006.asp.
About netGuru, Inc.
netGuru is a technology and services company offering document and
project collaboration software/solutions and technical services and
support. For more information, please visit www.netguru.com.
About BPO Management Services, Inc.
BPO Management Services (BPOMS) is a BPO service provider who
offers a diversified range of solutions and support services to
fulfill the back-office needs of middle-market enterprises on an
outsourced basis. BPOMS supports middle-market businesses new to the
BPO market, established businesses that already outsource, and
businesses seeking to maximize return-on-investment from their
in-house workforce. For more information, please visit www.bpoms.com.