Netguru (NASDAQ:NGRU)
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From May 2019 to May 2024
netGuru, Inc. (Company) (Nasdaq:NGRU) entered into
definitive agreements to merge with privately held BPO Management
Services, Inc. (BPOMS) -- a provider of business process outsourcing
services, including human resources, information technology, document
management, and finance and accounting functions to middle-market
companies -- and divest its Indian engineering business process
outsourcing operations and related assets.
The proposed merger would result in BPOMS becoming a wholly-owned
subsidiary of netGuru, with BPOMS' stockholders exchanging their
shares of BPOMS common stock and preferred stock for shares of netGuru
common stock and preferred stock, and netGuru assuming the obligations
under BPOMS' outstanding options and warrants. It is anticipated that
BPOMS stockholders would then hold approximately 90% of netGuru's
equity interests that would be outstanding immediately following the
consummation of the merger, excluding most new equity or equity-based
securities, if any, issued by netGuru or BPOMS after August 29, 2006.
The divestiture of the Indian operations would occur simultaneously
with the merger and involve the transfer of netGuru's Indian
subsidiary and certain additional assets and liabilities to an entity
owned and controlled by affiliates of netGuru, Inc.
In connection with the merger and divestiture, netGuru would
declare a cash dividend and conduct a reverse stock split. If
declared, the cash dividend would be approximately $3.5 million, or
approximately 18 cents per share of netGuru common stock outstanding
prior to the planned reverse stock split, and would become payable out
of $1.5 million in cash expected to be provided by BPOMS in the merger
and $2.0 million in cash expected to be received by netGuru from the
divestiture.
After the declaration of the dividend but prior to the payment of
the dividend and consummation of the merger, netGuru would effect a
1-for-30 reverse stock split of its approximately 19.2 million
outstanding common shares. In addition, netGuru would create three
series of preferred stock containing, among other terms, various
conversion, liquidation, redemption, voting, director election, and
board observation provisions. Shares of BPOMS preferred stock would
convert into shares of the newly created netGuru preferred stock at
the closing of the proposed merger.
If all closing conditions are met, the merger and divestiture are
anticipated to be completed by December 2006. After the merger and
divestiture are completed, the Company's remaining operations -- Web4
enterprise content management software and netGuru Systems -- would be
integrated into BPOMS' existing operations. BPOMS' management team
would assume the Company's executive and other management positions,
although it is anticipated that netGuru's chief financial officer,
Bruce Nelson, and chief operating officer, Koushik Dutta, will retain
their current positions. In addition, directors selected by BPOMS
would assume most or all positions on the Company's board of
directors, including chairman. The Company would also change its name
to BPO Management Services, Inc., to reflect its new primary business
of providing business process outsourcing and IT services, and apply
for a new trading symbol.
Patrick Dolan, BPOMS' chief executive officer, commented: "We
believe our merger with netGuru would provide not only access to the
capital markets to support future growth but also key software and
technology to complement and strengthen our existing operations.
Demand for back-office business process outsourcing services,
especially from the under-served middle market, is rising, and with
economic and business growth continuing, we feel this merger
represents a timely and strategic move."
About the proxy statement and annual stockholders meeting to vote
on proposed merger:
In connection with the proposed transactions, a proxy statement
will be mailed to netGuru, Inc. stockholders to provide additional
information, including the date, time, and location of the annual
stockholders meeting. netGuru will also file the proxy statement with
the U.S. Securities and Exchange Commission (SEC). Stockholders are
advised to read the proxy statement, which will contain important
information about the proposed transaction. A copy of the proxy
statement-when available-and other documents filed by netGuru with the
SEC may be found free of charge at the SEC's web site at www.sec.gov.
Copies of the proxy statement-when available-and other documents filed
by netGuru with the SEC may also be obtained free of charge from
netGuru by directing a request to: netGuru, Inc.; Attention: Bruce
Nelson; Chief Financial Officer; (714) 974-2500, extension 5215.
netGuru and its executive officers and directors may be deemed
participants in the solicitation of proxies from the stockholders of
netGuru in favor of the merger with BPOMS, the divestiture, the
reverse stock split, the name change and other corporate matters.
Additional information regarding the interests of netGuru's executive
officers and directors in the proposed transactions may be found in
the proxy statement and the Company's other SEC filings.
About BPO Management Services, Inc.
BPO Management Services (BPOMS) offers strategic new business
products and services for the business process outsourcing (BPO)
market. BPOMS is both a BPO direct service provider and expert BPO
project manager. BPOMS supports middle-market businesses new to the
BPO market, established businesses that already outsource, and
businesses seeking to maximize return-on-investment in their in-house
workforce. For more information, please visit www.bpoms.com.
About netGuru, Inc.
netGuru is an engineering services company offering engineering
business process outsourcing services for the architecture,
engineering, and construction (A/E/C) industry; document/project
collaboration software/solutions for A/E/C companies, enterprise
software providers, software integrators, and other businesses engaged
in document/project-centric operations; and technical services and
support. netGuru offices are located in the United States, Europe, and
India. For more information, please visit www.netguru.com .
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995:
With the exception of historical or factual information, the
matters discussed in this press release, including without limitation,
the proposed terms and timing of the merger and divestiture, the
proposed terms and timing of the declaration and payment of a cash
dividend, the proposed terms and timing of the reverse stock split and
other share-related transactions, the proposed integration and primary
business of the post-merger company, management changes, and other
corporate and transactional matters are forward-looking statements
that involve risks and uncertainties. Actual future results may
differ. Factors that could cause or contribute to such differences in
results include, but are not limited to, the need for stockholder and
other approvals, the continued willingness and ability of the parties
to consummate the merger, divestiture and related transactions,
changes in market and business conditions, the Company's ability to
remain listed on Nasdaq or to re-list on Nasdaq in conjunction with
the proposed transaction, the parties' future issuances of equity or
equity-based securities, and other risks and factors detailed from
time to time in the Company's public statements and its periodic
reports and other filings with the U.S. Securities and Exchange
Commission.