Primus Knowledge Solutions (NASDAQ:PKSI)
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ATG to Acquire Primus Knowledge Solutions, Inc.
Combination Will Create One of the Largest Online Commerce and Service Software
Companies
CAMBRIDGE, Mass. and SEATTLE, Aug. 10 /PRNewswire-FirstCall/ -- ATG (Art
Technology Group, Inc. (NASDAQ:ARTG)) the software provider behind the Web's
richest customer experiences and Primus Knowledge Solutions, Inc.
(NASDAQ:PKSI), an award-winning customer service software provider, today
announced a definitive agreement for ATG to acquire Primus. Under the terms of
the all stock deal, the transaction is valued at approximately $30 million to
$33 million, based upon ATG's closing stock price as of August 9, 2004. For the
12 month period ended June 30, 2004, the two companies had combined revenue of
more than $90 million. Cost synergies between the two companies are expected
to result in between $10 million and $15 million in annual savings beginning in
2005. The transaction is expected to close during the fourth quarter of 2004
and be accretive to ATG's forecasted results for the full year 2005.
ATG's industry-leading software for online commerce and marketing combined with
Primus' award-winning customer service software solutions will create one of
the industry's largest online commerce and service software companies. The
combination will produce the most complete consumer-facing platform to work
seamlessly through Web, email, call center, and other channels.
"Companies want to market to, sell to and service their customers through a
variety of channels and provide the most seamless, integrated experience for
these customers," said Bob Burke, president and CEO of ATG. "Combining Primus'
products and technical expertise with ATG creates an e-business powerhouse,
with the breadth of technology and the critical mass that greatly enhances our
ability to provide complete customer experience solutions across all channels."
ATG delivers a rich customer experience through integrated customer-facing
marketing, selling and service applications. ATG software solutions include:
* The commerce application used by more high-end Web sites than any
other
* The # 1 Scenario Personalization solution according to the
Information Management Association. ATG Scenario Personalization SM
is used by top performing Web sites including American Airlines,
AT&T Wireless, Fidelity Investments, InterContinental Hotels Group
(ranked the Best International Hotel Site), Neiman Marcus, and Wells
Fargo to manage customer-facing business processes
* Marketing solutions that uniquely integrate email and Web
interactions, ranked among the top four in the industry by Gartner
* Customer service technology that provides information that is more
intelligent, personal and relevant
Primus is a recognized leader in self- and assisted-service technologies. Its
software solutions include:
* The highest ranking solution in Web Self-Service suites from Gartner
* Advanced email response management technology ranked # 1 by Gartner
* Extensive knowledgebase and natural language processing search
technology supporting call centers, help-desk staff, field service
workers, wireless users and self-service sites
* Call center problem resolution technology integrated with major CRM
suites such as Siebel, PeopleSoft and Remedy
"The combination of ATG's commerce and marketing solutions with Primus'
award-winning customer service and support technologies is a powerful and
natural fit," said Michael Brochu, chairman, president and CEO of Primus. "This
joint offering will provide enterprises with the industry's most integrated
customer experience solution to power their e-business initiatives and is a
win-win for our customers, shareholders, employees, and partners."
The acquisition creates a number of synergies on both the top and bottom line.
The opportunity to sell integrated commerce and service solutions into each
company's respective customer base provides ATG with significant revenue growth
potential. On the expense side, the combination is expected to generate
between $10 million and $15 million in annual savings beginning in 2005,
through workforce synergies, facilities consolidation and the merger of
accounting, legal and regulatory functions.
"Consolidation in the eService market is necessary as enterprises are looking
for integrated multi-channel solutions that leverage all aspects of the
customer service and support continuum," said Esteban Kolsky, senior research
analyst, Gartner, Inc. "The combination of e-commerce and e-marketing with
self- and assisted-service software solutions creates a necessary offering that
enterprises today require to enhance the overall customer experience."
Terms of the Agreement
Under the terms of the agreement, ATG is acquiring all of the outstanding
shares of Primus. Upon completion of the transaction Primus shareholders are
expected to own approximately 30 percent to 32 percent of the combined
company's outstanding stock on a fully diluted basis. The transaction is
expected to be tax-free to Primus shareholders. Based upon ATG's latest
closing stock price, and assuming expected exchange ratios in the range of
1.2976 to 1.4169 ATG shares for each diluted share of Primus, the transaction
is valued at approximately $30 million to $33 million. The exchange ratio is
subject to adjustment within this range based upon Primus' achievement of
specified minimum cash and working capital requirements at closing, but in no
event will the exchange ratio be less than 1.2976 ATG shares for each diluted
share of Primus.
All directors and executive officers of Primus and certain other shareholders,
owning in aggregate approximately 14.6% of Primus' outstanding shares, have
signed an agreement to vote their shares in favor of the transaction. Both
Primus' and ATG's boards of directors have unanimously approved the
transaction. The transaction requires the approval of shareholders of both
companies. Pending legal and regulatory review and shareholder approval, the
transaction is expected to close during the fourth quarter of 2004.
As part of the transaction, ATG anticipates that it will be adding two members
to its board of directors, bringing the total to nine board members. It is
anticipated that Michael Brochu and Daniel Regis, chairman of Primus' audit
committee, will become members of the board of directors of ATG.
SG Cowen is acting as exclusive financial advisor to ATG, and Broadview is
acting as financial advisor to Primus in connection with this transaction.
Financial Summary
The combined company is anticipated to generate more than $100 million in
revenue for 2005 and is expected to be both profitable and cash flow positive
in 2005.
(Unaudited, Dollars in 000's) Twelve Months Ended June 30, 2004
Combined
ATG Primus Company
Total revenues $62,903 $27,675 $90,578
License revenue $19,696 $11,059 $30,755
Percent of total revenues 31% 40% 34%
Services revenue $43,207 $16,616 $59,823
Percent of total revenues 69% 60% 66%
Cash, cash equivalents and
marketable securities $32,755 $8,335 $41,090
Employees 324 155 479
Conference Call Notice
In conjunction with this news release, ATG and Primus management will host a
conference call for investors at 9:00 a.m. ET on Wednesday, August 11, 2004.
The call will be broadcast live over the Internet. Investors interested in
listening to the Webcast should log onto the "Investors" section of the ATG Web
site, located at http://www.atg.com/, at least 15 minutes prior to the event's
broadcast. To access the live conference call, please dial 800-500-0920 or
719-457-2699. A replay of the conference call can be accessed for a period of
one week by dialing 888-203-1112 or 719-457-0820 (confirmation code: 914952) or
via Webcast on ATG's Web site.
About Primus Knowledge Solutions, Inc.
Primus Knowledge Solutions develops award-winning software that enables
companies to provide a superior customer experience via contact centers, help
desks, Web self-service, and electronic communication channels. Primus
technology powers every interaction with knowledge to increase customer
satisfaction and reduce operational costs. The company continues to receive
industry accolades for its robust product platform, including a 2004 CRM
Excellence Award and 2004 Users Choice Award for Primus(R) KnowledgeCenter, and
"Strong Positive" ratings from Gartner, the leading provider of research and
analysis on global IT, in both the Web Self-Service Gartner MarketScope for
1H04 and the ERMS Gartner MarketScope for 1H04. In 2003, Primus received the
STAR Award for "Best Support Technology Vendor" from the Service & Support
Professionals Association (SSPA), was recognized for its trend-setting products
and named one of the "100 Companies that Matter in Knowledge Management" by
KMWorld magazine, and received the CRM Excellence Award from the editors of
Customer Interaction Solutions magazine. Global organizations such as Allied
Irish Bank, The Boeing Company, CompuCom, EMC, Ericsson, Inc., Fujitsu Limited,
Inc., IBM, HSBC, Orange, Motorola, 3Com, and T-Mobile rely on Primus technology
to enhance their customer service and support initiatives. Visit
http://www.primus.com/ for more information.
About ATG
ATG (Art Technology Group, Inc.) delivers innovative software to help high-end
consumer-facing companies create a richer, more adaptive interactive experience
for their customers and partners online and via other channels. ATG has
delivered category-leading e-business solutions to many of the world's
best-known brands including Best Buy, Kingfisher, Neiman Marcus, Target,
Fidelity Investments, Friends Provident, Merrill Lynch, Wells Fargo, A&E
Networks, Warner Music, AT&T Wireless, France Telecom, Philips, Procter &
Gamble, Hewlett-Packard, American Airlines, InterContinental Hotels Group, US
Army, and US Federal Aviation Administration. The company is headquartered in
Cambridge, Massachusetts, with additional locations throughout North America,
Europe, and Asia. For more information about ATG, please visit
http://www.atg.com/.
NOTE: ATG and Art Technology Group are registered trademarks of Art Technology
Group, Inc., and Scenario Personalization is its service mark. All other
product names, service marks, and trademarks mentioned herein are trademarks of
their respective owners.
Additional Information About The Acquisition And Where To Find It
ATG intends to file a registration statement on Form S-4 in connection with the
transaction, and ATG and Primus intend to mail a joint proxy
statement/prospectus to their respective stockholders in connection with the
transaction. Investors and security holders of ATG and Primus are urged to read
the joint proxy statement/prospectus when it becomes available because it will
contain important information about ATG, Primus and the transaction. Investors
and security holders may obtain a free copy of the joint proxy
statement/prospectus (when it is available) at the SEC's Web site at
http://www.sec.gov/. A free copy of the joint proxy statement/prospectus may
also be obtained (when it is available) from ATG or Primus. ATG and Primus file
annual, quarterly and special reports, proxy and information statements, and
other information with the SEC. Investors may read and copy any of these
reports, statements and other information at the SEC's public reference rooms
located at 450 5th Street, N.W., Washington, D.C., 20549, or any of the SEC's
other public reference rooms. Investors should call the SEC at 1-800-SEC-0330
for further information on these public reference rooms. The reports,
statements and other information filed by ATG and Primus with the SEC are also
available for free at the SEC's Web site at http://www.sec.gov/. A free copy of
these reports, statements and other information may also be obtained from ATG
or Primus.
The executive officers and directors of ATG and Primus may be deemed to be
participants in the solicitation of proxies from the stockholders of Primus and
ATG in favor of the acquisition. A description of the interests of ATG's
executive officers and directors in ATG is set forth in the proxy statement for
ATG's 2004 Annual Meeting of Stockholders, which was filed with the SEC. A
description of the interests of Primus' executive officers and directors in
Primus is set forth in the proxy statement for Primus' 2004 Annual Meeting of
Stockholders, which was filed with the SEC. Investors and security holders may
obtain more detailed information regarding the direct and indirect interests of
ATG's and Primus' executive officers and directors in the acquisition by
reading the preliminary joint proxy statement/prospectus filed with the SEC
when it becomes available.
This press release contains forward-looking statements for purposes of the safe
harbor provisions under The Private Securities Litigation Reform Act of 1995.
These statements involve known and unknown risks and uncertainties that may
cause ATG's and Primus' actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such forward-
looking statements. In some cases, you can identify forward-looking statements
by terminology such as, "may", "should", "expects", "plans", "anticipates",
"believes", "estimates", "predicts", "potential", "continue", or the negative
of these terms or other comparable terminology. Important risk factors
affecting ATG's and Primus' business generally may be found in their periodic
reports and registration statements filed with the Securities and Exchange
Commission at http://www.sec.gov/. Risk factors related to the subject matter
of this press release include the possibilities that ATG may not be successful
in integrating Primus' business with its own; that the anticipated cost savings
from synergies will be less than expected; that depreciation, amortization and
potential impairment charges associated with the acquisition could adversely
affect the combined company's results of operations; that shareholder approval
and governmental clearances needed to consummate the transaction may be delayed
or withheld; that ATG's and Primus' partners, customers or investors may react
unfavorably to the combination; that if the acquisition is not completed, ATG's
and Primus' businesses may be harmed; the risks and costs of potential and
existing intellectual property litigation; the possibility that either
company's product deployments will not be successful, on time or significantly
enhance the user's Internet experience or handle user volumes; that those
customers leveraging the combined companies' products won't have the
opportunity to increase revenue and decrease future costs; the need to adapt to
rapid changes so products do not become obsolete; the possibility of errors in
both companies' software products; the possibility that the company will not be
successful in combining the companies' solutions or the companies' combined
solutions will not make customer implementations faster or more flexible or
permit the customer to meet its customer-facing or infrastructure requirements;
that the companies' products will not continue to be integrated with third
party applications or application servers or will not support all Web services
enabled systems; that ATG's product strategy may change in the future; and the
risks and costs of intellectual property litigation. Neither ATG nor Primus
undertakes any obligation to update any of the forward-looking statements after
the date of this press release.
MEDIA CONTACTS: INVESTOR CONTACTS:
Victor Beck Ed Terino
617-386-1246 617-386-1005
Kristin Treat Ron Stevens
206-834-8325 206-834-8341
DATASOURCE: Primus Knowledge Solutions, Inc.
CONTACT: media, Victor Beck, +1-617-386-1246, or , or
investors, Ed Terino, +1-617-386-1005, or , both of ATG; or
media, Kristin Treat, +1-206-834-8325, or , or investors, Ron
Stevens, +1-206-834-8341, or , both of Primus Knowledge
Solutions, Inc.
Web site: http://www.atg.com/
Web site: http://www.primus.com/