FRIENDLY OFFER IN US BY NTT DATA FOR INTELLIGROUP

 

TIDMNPN 
 
RNS Number : 5649N 
Nippon Telegraph and Telephone Corp 
14 June 2010 
 
 
                                                                   June 14, 2010 
 
                       Company Name:  Nippon Telegraph and Telephone Corporation 
                               Representative:  Satoshi Miura, President and CEO 
   (Code No.: 9432, First section of Tokyo, Osaka and Nagoya Stock Exchanges and 
                                            Fukuoka and Sapporo Stock Exchanges) 
 
 
 
          NOTICE REGARDING THE LAUNCH OF A FRIENDLY OFFER IN THE U.S. 
       BY NTT DATA CORPORATION'S SUBSIDIARY FOR INTELLIGROUP, INC. SHARES 
 
NTT DATA CORPORATION ("NTT DATA"), a subsidiary of Nippon Telegraph and 
Telephone Corporation ("NTT"), has announced that NTT DATA and Intelligroup, 
Inc., a U.S.-based IT service company (CEO: Vikram Gulati, Head Office: 
Princeton, New Jersey, U.S.A.; "Intelligroup") have entered into a merger 
agreement pursuant to which Mobius Subsidiary Corporation, a wholly-owned 
subsidiary of NTT DATA, will make a cash tender offer for all of Intelligroup's 
common shares and subsequently acquire any remaining Intelligroup shares through 
a cash merger.  For more details, please see the attached press release by NTT 
DATA. 
 
 
 
For further inquiries, please contact: 
 
Kazu Yui or Ken Araki 
Investor Relations Office 
Finance and Accounting Department 
Nippon Telegraph and Telephone Corporation 
Phone:  [phone] 
 
Fax:    [phone] 
                                                                   June 14, 2010 
For Immediate Release 
 
            NTT DATA's subsidiary to launch a friendly offer in the 
                      U.S. for Intelligroup, Inc. shares 
 
NTT DATA CORPORATION, a Japanese IT company (hereafter, "NTT DATA") and 
Intelligroup, Inc. a US-based IT service company (CEO: Vikram Gulati, Head 
Office: Princeton, New Jersey, USA, hereafter "Intelligroup") today announced 
that they have entered into a merger agreement pursuant to which Mobius 
Subsidiary Corporation, a wholly-owned subsidiary of NTT DATA, will make a cash 
tender offer for all of Intelligroup's common shares and subsequently acquire 
any remaining Intelligroup shares through a cash merger (hereafter, the 
"Transaction"). The Transaction was unanimously approved by the Boards of 
Directors of Intelligroup and NTT DATA. Concurrently with this release, NTT DATA 
is announcing the tender offer in the United States pursuant to U.S. tender 
offer rules. Furthermore, this transaction does not fall under the definition of 
a tender offer as stated in Article 27- 2 (1) of the Financial Instruments and 
Exchange Act, and is subject to customary regulatory approvals and certain 
closing conditions. 
 
1.    Purpose of the Transaction 
NTT DATA and its subsidiaries (hereafter, the "Group") have focused on improving 
and strengthening its international presence, in order to support the IT-related 
needs of clients who are developing their businesses globally. The purpose of 
this tender offer is to further contribute to such efforts of the Group. 
Intelligroup is an enterprise applications systems integrator providing 
consulting, implementation, testing, application management, infrastructure 
management, and other IT services primarily related to SAP and Oracle 
applications for global corporations. Intelligroup has developed industry award 
winning ERP-related tools and pre-configured, vertical specific solutions that 
reduce costs and deliver quick return on investment for customers. Intelligroup 
is a services partner of SAP and Oracle in multiple regions, and is featured in 
leading IT analysts' ERP and outsourcing reports. Intelligroup currently 
provides SAP, Oracle and related services to major corporations located in the 
U.S., UK, Denmark, Japan, India and the Middle East. 
 The transaction would give NTT DATA access to Intelligroup's blue-chip client 
base and specialized knowledge of SAP and Oracle.  NTT DATA would also benefit 
from Intelligroup's deep industry experience and solutions focused on the life 
sciences, high-tech and discrete manufacturing, and consumer packaged goods 
verticals and its efficient global delivery model, enabled by world-class 
delivery centers in India.  Furthermore, the transaction would result in better 
service for Intelligroup's and NTT DATA's global client bases, through 
coordination and cooperation with NTT DATA global and local affiliates. 
Vikram Gulati, Chief Executive Officer of Intelligroup, said, "NTT DATA's size 
and global IT capabilities including data centers and cloud computing enhance 
significantly our ERP solution capability and also allow us to offer total 
outsourcing solutions. It enables us to offer enhanced vertical offerings, and 
greater geographic coverage to our customers. Further, this allows us to 
leverage the financial strength of NTT DATA which enables us to make greater and 
more long term investments in the business.  The synergy between the two firms 
creates a formidable force that will enable us to win in the marketplace." 
NTT DATA decided to launch the tender offer in the belief that the Transaction 
will contribute greatly to the growth of both NTT DATA and Intelligroup's 
businesses. 
 
2.    Outline of the Tender Offer 
(1)   Offeror 
Mobius Subsidiary Corporation 
 In connection with the Transaction, NTT DATA's wholly owned subsidiary, NTT 
DATA INTERNATIONAL L.L.C.  (Head Office: New York City, New York, hereafter 
"NDI") has established a wholly owned merger subsidiary, Mobius Subsidiary 
Corporation (Head Office: Newark, New Jersey, hereafter "Mobius"). Following 
completion of the tender offer, Mobius will merge with and into  Intelligroup, 
and  Intelligroup will become a wholly owned subsidiary of NDI. 
 
(2)   Tender Offer Target 
?Company Name             :Intelligroup, Inc. 
?Business Description      :Consulting, Systems Integration, Software 
Development, Licensing, Outsourcing 
?Established                    :1987 
?Headquarter                   :5 Independence Way, Suite #220 Princeton, NJ 
08540 
?Representative               :Vikram Gulati , Chief Executive Officer 
?Listed Stock Exchange:OTC Bulletin Board 
?Capital                          :USD 413,000 (JPY 37mn) 
?Shares Outstanding        :41,252,888 common shares (As of June 3, 2010) 
?Fiscal Year Ending          :December 31 
?Relationship with NTT DATA:NTT DATA and Intelligroup do not have any capital, 
personal or transactional relationships 
?Number of Employees    :2,101 (As of December 31, 2009) 
?Operating Performance in Recent Fiscal Year: 
(USD '000) 
+------------------+-------------------+------------------+ 
| Fiscal Year      |       2008        |      2009        | 
+------------------+-------------------+------------------+ 
| Revenue          |           157,101 |         126,518  | 
+------------------+-------------------+------------------+ 
| Net Income       |             6,689 |           10,800 | 
+------------------+-------------------+------------------+ 
| Total Assets     |            60,230 |           67,403 | 
+------------------+-------------------+------------------+ 
| Net Assets       |            35,042 |           46,304 | 
+------------------+-------------------+------------------+ 
 
               Reference (in JPY) 
                                                      (JPY mn) 
+------------------+-------------------+------------------+ 
| Fiscal Year      |       2008        |      2009        | 
+------------------+-------------------+------------------+ 
| Revenue          |            14,139 |           11,387 | 
+------------------+-------------------+------------------+ 
| Net Income       |               602 |              972 | 
+------------------+-------------------+------------------+ 
| Total Assets     |             5,421 |            6,066 | 
+------------------+-------------------+------------------+ 
| Net Assets       |             3,154 |            4,167 | 
+------------------+-------------------+------------------+ 
     (Note) Exchange rate: USD 1=JPY 90 (same rate used for all further data) 
 
(3)   Tender Offer Period 
The tender offer will commence within 6 business days following the date of the 
merger agreement (June 14, 2010 (Eastern Daylight Time in the U.S.) and will 
remain open for 20 business days unless the offer is extended. 
 
(4)   Tender Offer Price 
USD 4.65 per share 
(JPY 418.5 per share) 
 
(5)   Total Capital Required 
Approximately USD 199 million 
The total required capital is calculated by multiplying the number of total 
outstanding shares of Intelligroup (on a fully diluted basis) and the offer 
price indicated in (4). 
 
(6)   Minimum Number of Shares to be Purchased 
NTT DATA will purchase the tendered shares if all the conditions of the tender 
offer are satisfied or waived, including that the number of tendered shares is 
equal to at least a majority of the total outstanding shares of Intelligroup's 
outstanding common stock on a fully diluted basis. 
 
(7)    Announcement Date of Commencement of Tender Offer 
Announcement for purposes of the United States Securities and Exchange Act will 
be made in the United States in accordance with U.S. tender offer regulations; 
therefore a separate announcement in Japan will not be made. 
 
3.    Change in NTT DATA's Ownership of Intelligroup Stock as a Result of the 
Tender Offer 
Ownership prior to tender offer and merger: - 
Ownership after the tender offer and merger: 100.0% 
After the expiration of thetender offer, Mobius will merge with and into 
Intelligroup through a cash merger and, as the surviving company, Intelligroup 
will become a wholly owned subsidiary of NDI. The offer price in the subsequent 
cash merger will be the same as the initial tender offer price of USD 4.65per 
share. 
 
4.    Approval from Board of Directors of Intelligroup 
The transaction has been unanimously approved by the Board of Directors of 
Intelligroup as of June 13, 2010 (U.S. time) 
 
5.    Impact on Earnings 
Upon successful completion of the tender offer and merger, Intelligroup will 
become a consolidated  subsidiary of NTT DATA. 
 
Forward Looking Statements 
This announcement contains forward-looking statements.  Forward-looking 
statements are expressed by phrases such as 
"thinks,""expects,""plans,""foresees,""intends,""should,""predicts,""future,"and 
other similar expressions, or statements regarding strategies, goals or 
purposes. There is a possibility that, due to various factors, the 
forward-looking statements contained in this press release and the actual 
results could differ greatly, including but not limited to factors such as (1) 
the macro level environment or the competitive landscape of the IT industry, (2) 
risks and certain restrictions relating to regulations or litigation, (3) 
changes in applicable regulations, (4) changes to tax law or other laws, or the 
effects of changes to the economy in general, (5) risk that conditions to 
closing will not be met, (6) risk that necessary regulatory approvals will not 
be obtained, or approvals are obtained with unexpected conditions, or (7) other 
risks associated with the execution of the transaction. 
 
The tender offer for the outstanding common stock of Intelligroup referred to in 
this press release has not yet commenced. This press release is neither an offer 
to purchase nor a solicitation of an offer to sell any securities. The 
solicitation and the offer to buy shares of Intelligroup common stock will be 
made pursuant to an offer to purchase and related materials that Mobius intends 
to file with the U.S. Securities and Exchange Commission. The tender offer 
statement (including an offer to purchase, a related letter of transmittal and 
other offer documents), and the solicitation/recommendation statement which will 
be filed by Intelligroup will contain important information that should be read 
carefully and considered before any decision is made with respect to the tender 
offer. These materials will be sent free of charge to all stockholders of 
Intelligroup. In addition, all of these materials will be available at no charge 
from the U.S. Securities and Exchange Commission through its web site at 
http://www.sec.gov. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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