TeleTech to Acquire Newgen Results Corporation
22 August 2000
TeleTech Acquires B2B Enterprise Channel Management Services Provider in $200 Million Transaction
DENVER - TeleTech , the leading global provider of eCommerce-enabling
customer management solutions (eCRM), today announced a definitive agreement to
acquire Newgen Results Corporation for approximately $200 million in a stock-
for-stock exchange accounted for as a pooling of interests. The acquisition
strengthens TeleTech's existing database management capabilities and further
enhances TeleTech's end-to-end eCRM solution with the addition of an enterprise
channel management offering.
Newgen is a leading provider of Internet-based solutions and B2B
enterprise channel management services, including customized database
management, personalized direct marketing and other CRM-related services,
targeted to automobile dealers and manufacturers nationwide. Newgen's highly
scalable, database-driven solution strengthens and broadens relationships with
its clients' channel partners and resellers. Newgen's solutions can be
leveraged to increase effectiveness throughout each link in the distribution
chain, including distributors, dealers, retailers, original equipment
manufacturers, resellers, service centers and contractors.
TeleTech plans to leverage Newgen's Internet-based eCRM applications,
including its expertise in one-to-one and direct marketing, into TeleTech's
specialized solutions for its key industry segments -- such as
telecommunications, financial services, transportation, technology and
healthcare. Newgen's electronic channel management capabilities will enable
TeleTech to expand its vertical market focus to industries with extensive
dealer relationships, such as pharmaceuticals, office automation and financial
services. TeleTech also plans to leverage its global footprint and
longstanding relationships with Global 1000 clients to expand Newgen services
on a worldwide basis.
"The indirect channel will continue to be a dominant force for revenue
generation and eCRM," said Scott Thompson, TeleTech chief executive officer
and president. "Whether a company chooses to go to market with a direct or
indirect channel strategy, TeleTech now has a complete eCRM solution to offer.
This is a sizeable revenue generating opportunity for us, which is expected to
significantly contribute to the company's growth rate."
"Our ability to improve customer loyalty shows the value of managing
indirect customer relationships," said Jerry Benowitz, Newgen's chairman,
president and chief executive officer. "Joining forces with TeleTech will
allow us to create an infrastructure that enables global enterprises to extend
their organization to any member of a business partner network. We believe
this is an incredible opportunity for our clients, shareholders and
employees."
"Manufacturers realize dealers are extremely effective at managing the
customer relationship, therefore the dealer channel is thriving," commented
Ken Tuchman, TeleTech chairman. "Forrester Research reports that
manufacturers expect resellers will be responsible for 84 percent of their
sales during the next two years. As a third party, TeleTech can enhance the
dealer-manufacturer relationship, as well as dealer-customer relationship,
creating overall efficiencies in the distribution network. Our 18 years of
experience in managing customer relationships makes our move into the indirect
channel marketplace an easy transition."
TERMS OF THE DEAL
Under the terms of the agreement, TeleTech will acquire Newgen for stock
in a tax free exchange valued at approximately $200 million or $18 per share
for each of Newgen's 10.5 million common shares outstanding. Each share of
Newgen will be exchanged for shares of TeleTech stock, based on the average
price of TeleTech stock prior to closing, subject to a collar.
The transaction, which has been unanimously approved by the Board of
Directors of each company, is subject to a Newgen shareholder vote, regulatory
approvals and other customary closing conditions. The transaction is expected
to close in the fourth quarter of 2000 and is expected to be immediately
accretive to TeleTech, exclusive of one-time transaction costs.
Newgen will operate as an independent entity within TeleTech Companies
Group, led by Michael Foss, chief financial officer and president, TeleTech
Companies Group. Jerry Benowitz and his management will continue operating
Newgen.
INVESTOR CONFERENCE CALL
Management of TeleTech and Newgen will hold a conference call to discuss
today's announcement at 8:30 a.m. EST. Investors can access the call by
dialing 212-748-2809. A replay of the conference call will be available by
dialing 1-800-633-8284 (code: 16124529), starting at approximately 10:30 a.m.
EST and will play for seven days.
NEWGEN PROFILE
Newgen is a leading business-to-business channel management application
service provider specializing in customer-relationship management (CRM) and
e-CRM for the automotive industry. The Company combines marketing and
customer retention with an in-depth knowledge of service department operations
to deliver highly targeted and customized solutions to the automotive
community. Newgen currently supports over 5,000 auto dealerships nationwide
and maintains relationships with leading automotive companies and dealers
groups including Audi, BMW, Ford, General Motors, Infiniti, Jaguar, Kia,
Mitsubishi, Nissan, Saab, Volkswagen, Volvo, plus AutoNation and CarMax Auto
Superstores.
For the first six months of 2000, Newgen reported revenues of
$39.8 million. Newgen's reported net income was $4.7 million, or $0.42 per
share (diluted) for the first six months of 2000, and adjusted on a fully
taxed basis, net income for the first six months of 2000 was $2.9 million or
$0.26 per share (diluted). For 1999, Newgen posted total revenues of
$55.2 million. The company's net income for 1999 was $4.3 million or
$0.50 per share (diluted) for 1999, or $3.0 million and $0.31 per share
(diluted) on a fully taxed basis.
TELETECH PROFILE
Founded in 1982, TeleTech is the leading provider of integrated,
e-commerce-enabling customer management solutions (eCRM) for global
organizations predominantly in the telecommunications, financial services,
technology, government and transportation industries. Its innovative customer
interaction platform, CyberCare(TM), integrates the full spectrum of voice and
Internet communications, including custom e-mail response, "chat" and
extensive Web co-browsing capabilities. TeleTech operates
15,300 state-of-the-art customer interaction center workstations and employs
19,300 people in nine countries. Through 35 customer interaction centers in
the Americas, Europe and Asia, TeleTech couples high-velocity e-infrastructure
service deployment with premier quality e-customer relationship management to
assure our clients/partners unparalleled success in acquiring, retaining and
growing customer relationships.