Concerto Software, Inc, a proven provider of customer interaction management (CIM) solutions, today announced that it has entered into an agreement and plan of merger with Melita International, Ltd, a global provider of products and services focused on maximising contact centre effectiveness.
The transaction is valued at approximately $145.2 million. Under the terms of the merger agreement, Concerto Software will combine with Melita and the combined company will operate under the name of Concerto Software, Inc.
Except for certain shares held by certain officers and a director of Concerto Software, which will be exchanged for a minority equity interest in the new company, all of Concerto Software`s outstanding shares will be purchased for $12 per share in cash. This represents a 29% premium to yesterday`s closing price of $9.31 per share. Golden Gate Capital and Oak Investment Partners, both private equity investment firms and majority owners of Melita, are providing the financing for the transaction.
In addition, Concerto Software today announced that based upon its preliminary estimates, it expects to report third quarter total revenue in the range of $26.5 million to $27.2 million and earnings of $0.07 - $0.08 per diluted share on a generally accepted accounting principles basis. The company also estimates that its cash and short-term investments at the end of the third quarter total approximately $28.8 million.
As a result of the merger, Concerto Software will strengthen its presence in the global CIM market and provide significant benefits to its worldwide customer base of more than 1 800 customers. The combined company will deliver expanded professional services, have increased direct and indirect sales reach, provide a wider array of solutions, and broaden its support infrastructure through centres of excellence throughout the Americas, Europe and Asia Pacific. Until the completion of the merger, the two companies will continue to operate as independent entities and both remain committed to supporting and further evolving all of their respective leading contact centre solutions pre- and post-transaction completion.
"We believe the merger will have a positive impact on both Concerto Software and Melita International, as well as on the industry as a whole," said Alpa Shah, vice-president, Frost & Sullivan. "The global synergies and product expansion resulting from this merger further solidifies Concerto Software`s position in the worldwide outbound dialling market. In addition, the momentum that Concerto Software has shown recently with its unified platform EnsemblePro, is evidence that the company is quickly becoming a viable contender in the large and growing inbound CIM market as well."
Jim Foy, president and chief executive officer of Concerto Software, will remain in that position following the merger. George Landgrebe, president and chief executive officer of Melita, will assume the role of executive vice-president of worldwide customer support of Concerto Software.
"With a broader base of customers and solutions, greater technology expertise, expanded services capabilities and broader distribution channels that will result from the merger, we believe Concerto Software will be well positioned to compete against the larger companies in both the inbound and outbound sectors of the CIM market," said Foy.
"I am excited by the prospect of working with the Melita team as their strong performance in their first quarter of operations proves they have world class solutions, first class employees and loyal customers. The knowledge, skills and abilities of our employees from both organisations remain key to our future success. The new company will emerge better equipped to provide customers with the most appropriate solutions to meet their business needs."
"Pooling our knowledge, experience and technology, we can deliver unique value to our customers," said George Landgrebe, president and CEO of Melita. "We are in the business of ensuring customers receive the world-class support, service and the contact centre solutions they require today, while helping them prepare for the future as their business evolves. Our continued commitment to the support and development of the companies` key products, including Conversations and Unison, will remain solid through the merger and beyond."
Concerto Software`s board of directors unanimously approved the transaction following receipt of the recommendation of a special committee comprised of an independent director of the company. The special committee of the company`s board of directors received the opinion of SG Cowen Securities Corporation that the cash consideration to be paid to Concerto Software`s stockholders is fair from a financial point of view.
Completion of the merger is subject to customary closing conditions, including approval by the holders of a majority of the common stock of Concerto Software and the securing of regulatory approvals. The transaction is expected to close late in the fourth quarter of 2003 or early in the first quarter of 2004.
Notwithstanding its recommendation and consistent with the terms of the agreement and plan of merger, the special committee`s financial advisor, SG Cowen Securities Corporation, will be available to receive unsolicited inquiries from any other parties interested in the possible acquisition of Concerto Software. If the special committee or Concerto Software`s board of directors determines that failing to take such actions would be inconsistent with its fiduciary duties to Concerto Software`s stockholders under applicable law, Concerto Software may provide information to and engage in discussions and negotiations with such other parties and take other appropriate actions in connection with any such indicated interest.
Prior to consummation of this transaction, Concerto Software will file a proxy statement with the United States Securities and Exchange Commission (SEC). Stockholders are urged to read the proxy statement when it becomes available to learn important information about Concerto Software, Melita and the proposed transaction. Stockholders will be able to obtain copies of these documents when they become available, along with other documents filed with the SEC, free of charge, through the Web site maintained by the SEC at http://www.sec.gov.
Stockholders can also obtain, free of charge, copies of the proxy statement when it becomes available, along with any documents Concerto Software has filed with the SEC, by contacting Concerto Software at (978) 952 0295. Concerto Software and the Concerto Software directors may be deemed to be participants in the solicitation of Concerto Software`s stockholders in favour of the merger. Information concerning the direct or indirect interests, by security holdings or otherwise, of these persons is contained in Concerto Software`s proxy statement relating to its annual meeting of shareholders filed with the SEC on 14 April 2003.
Webcast
Concerto Software and Melita will host a conference call at 3pm ET on 8 October, to discuss the merger and the preliminary financial estimates for third quarter 2003. To participate in the conference call, RSVP to (978) 952 0294 before 2.30pm ET. This call will be Webcast by CCBN and can be accessed through Concerto Software`s Web site at www.concerto.com. The Webcast will also be distributed over CCBN`s Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN`s individual investor centre (www.companyboardroom.com), or by visiting any of the investor sites in CCBN`s Individual Investor Network, such as America Online`s Personal Finance Channel, Fidelity Investments (www.fidelity.com) and others. Institutional investors can access the call via CCBN`s password-protected event management site, StreetEvents (www.streetevents.com).
A replay of the conference call will be available from 8 October 2003 at 5pm ET until 15 October 2003 at 11pm ET. To access the replay, dial (800) 642 1687 (from within the US or Canada) or (706) 645 9291 (from outside the US or Canada) and enter the passcode 3236088, or log onto the Concerto Software Web site at www.concerto.com.
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