own approximately
16 percent of the outstanding shares of Stellent common stock, and
Stellent shareholders will own approximately 84 percent of the combined
entity. The combined company will have an annual revenue run rate of
approximately $100 million,
and a cash and marketable securities position of approximately $70
million. The transaction is expected to be immediately accretive on
a pro forma basis, excluding the effects of non-cash or non-recurring
charges related primarily to expenses such as
amortization of certain intangible assets and acquisition costs. “We’re
excited about the strength of this combined entity and the opportunity
this merger provides to quickly extend our footprint across a larger
number of companies,” said Robert Olson, president and chief
executive officer (CEO) for Stellent. “Customers
are looking to consolidate their various content management needs,
including imaging, BPM, Web content management and records management,
with one vendor. This merger will enable Stellent to capitalize on
this trend by providing customers with a comprehensive suite of solutions
for managing both consumption-oriented content and high-volume, transaction-based
content.”
“Enterprises are increasingly turning to vendors
that offer an array of comprehensive content management capabilities,” said
Mark Gilbert, vice president and research director for Gartner. “Companiesneed
better access to their enterprise information to directly deliver business
results – and compliance capabilities – faster.
Document management, imaging and workflow, along with integrated document
archive and retrieval systems, records management, Web content management
and digital asset management, are key to making this happen.”
“We anticipate high-value synergies between our solutions and
Stellent’s product suite, including our shared commitment to
building powerful solutions focused on ease-of-use, rapid deployment,
return-on-investment (ROI) and a low total-cost-of-ownership. The
merger will enable the combined company to expand roll-outs in our
existing customer bases as well as satisfy the demand for broader solutions
among new customers,” said Mark K. Ruport, president and CEO
for Optika. “Our strong, combined
financial position will further solidify Stellent’s leadership
position in the content management market and create value for both
Stellent and Optika shareholders.”
“The market for new
content management software licenses was $2.29 billion in 2002 and
is expected to grow to $3.8 billion by 2007,” said Joshua
Duhl, IDC’s research director for content technologies. “Stellent’s
acquisition of Optika provides
complementary technology, partners, channels and customers, and creates
the opportunity for the combined company to expand itsshare of this
growing market. Stellent is already in a somewhat unique and strong
position in this market because of the demand for its file conversion
technology. With market consolidation proceeding at a rapid pace, this
acquisition places Stellent in a comfortable position to compete.”
Combined
Product Family Expands Stellent’s Functionality and
Offerings The merger with Optika will strengthen and expand Stellent’s
document imaging, business process management and compliance capabilities.
Optika’s
AcordeTM family of software products allows companies to manage content
and streamline critical transactions related to businessprocesses,
such as accounts payable, claims processing and expense reporting.
Additionally, Acorde seamlessly integrates with a variety of enterprise
resource planning (ERP) and line-of-business systems to drive process
efficiencies and cost savings that can result in significant ROI for
customers.
Combined with Stellent’s Universal Content Management
architecture — which
includes Web content management, document management, collaboration,
digital asset management and records management components — Optika’s
product line will enable Stellent to provide customers with a comprehensive
suite of solutions to manage both collaborative, consumption-oriented
content as well as content generated and circulated during complex
business transactions.
“Organizations are seeking more strategic enterprise content
solutions. The ability of ECM software to fully manage all enterprise
content by applying proper compliance and legal risk policies/procedures
is emerging as critical to Global 2000 organizations and
will drive a $9 billion ECM market by 2007,” said Andrew Warzecha,
senior vice president of META Group. “By 2006, approximately
60 percent of Global 2000 and government organizations will standardize
on a strategic ECM framework driven by increased efficiencies, reduced
risks and information architecture adaptability.”
In the short-term, Stellent plans to integrate the product lines via
Web services. Longer- term plans crepository.
“The ability to access document or content
management, imaging management and business process workflow capabilities – all
from the same supplier – is
significant,” said Mark Heindselman, manager of knowledge network
and information services for
Emerson Process Management, a current Stellent customer. “More
and more, Emerson is integrating our business processes in order to
manage all unstructured content – both desktop and transaction-oriented – through
a common access method. The ability to
access all of this functionality while managing content from a common
repository will be of even greater value.” Solid,
Marquee Customer Base
Stellent has more than 1,500 customers across a wide range of industries.
Its customer roster includes companies such as Procter & Gamble,
Merrill Lynch, Los Angeles County, British Red Cross, ING, Target
Corp., Janus, Emerson Process Management and
various BlueCross BlueShield organizations across 15 states.
Optika currently has a base of more than 2,000 customers, including
The Home Depot, Merrill Lynch, Georgia-Pacific, Bayer Corp. and Turner
Broadcasting Systems. This roster includes organizations from a number
of vertical markets that are currently key
industries for Stellent, such as manufacturing, finance, government
and insurance.
Combined with Optika’s customers, Stellent will possess a customer
base of more than 3,500 companies. Optika’s customer base also
will strengthen Stellent’s presence in the retail, distribution,
architecture/engineering/construction and higher education markets.
Expanded Partner and Channel Reach
Stellent maintains technology alliances with leading software infrastructure
vendors such as BEA, IBM, Microsoft, Oracle and Sybase, and also
partners with leading system
integrators such as Accenture, Deloitte & Touche and EDS. Optika
maintains strategic alliances with partners offering best-in-class
ERP solutions, such as PeopleSoft/J.D. Edwards, Microsoft Business
Solutions and Oracle, and with a variety of value-added
resellers (VARs) across North America. Combined, the resulting company
will have a robust partner and indirect sales channel consisting
of software infrastructure vendors, ERP solution providers, leading
system integrators and VARs
“As an Optika partner for 12 years, we feel the merger of Stellent
and Optika will bring major benefits to us and every Optika reseller,” said
Jan Letchman, president of Advanced Data Systems (ADS), Inc., Tallahassee,
Fla. “At ADS,
we see many opportunities in the southeast United States for adding
the strong Web content and document management capabilities of Stellent
to the existing Optika product line. The combined solution will have
a big impact in the marketplace.”
Terms of the Agreement
Under the merger agreement:
• Each outstanding share of Optika common stock will be converted
into the right to receive 0.44 of a share of Stellent common stock,
subject to adjustment
described below.
• All outstanding shares of Optika preferred
stock will be converted into the right to receive a total of $10
million in cash and, in certain circumstances described below, shares
of Stellent common stock.
• Each outstanding option to acquire shares of Optika common
stock will be assumed by Stellent and converted into the right
to acquire shares of Stellent common stock.
If the value of 0.44 of a share of Stellent common stock, based
on the average Stellent closing price over a period ending shortly
before the merger is consummated, is greater than $4.00, then:
• 80 percent of the value in excess of $4.00 will be allocated
to the holders of Optika common stock.
• 20 percent of the value in excess of $4.00 will be allocated
to the holders of Optika preferred stock.
This allocation will be accomplished by reducing the total number
of Stellent shares to be issued to holders of Optika common stock
and by issuing those shares to the holders of Optika preferred
stock. The total number of shares to be issued by Stellent will
not
change.
The transaction is subject to standard closing conditions including
stockholder approval and regulatory review. The companies expect
the transaction to close in April 2004.
Organizational Details
Ruport will join Stellent as an executive vice president, and Alan
Menkes, a current Optika board member, will join Stellent’s
board of directors. There are no significant employee changes anticipated
for Stellent or Optika.
Conference Call and Webcast
Stellent will host a conference call and Webcast at 9:00 a.m. CST
today, Jan. 12, 2004, to review this announcement. Callers in the
United States can dial 1-877-290-5723, and international callers
can dial 1-706-643-7707 (conference ID is “Stellent,
Inc.”).
Participants are encouraged to dial in at least five minutes before
the start time. Time will be allotted for questions and answers.
Investors unable to participate in the call may access a replay
of the entire transcript through Monday, Jan. 19, 2004. This will
be
available for U.S. callers at 1-800-642-1687 (ID #4885971) and
international callers at 1- 706-645-9291 (ID #4885971). The live
Webcast can be accessed via the investor relations area of Stellent’s
Web site (www.stellent.com).
Additional Information
Stellent intends to file a registration statement on Form S-4 in
connection with the transaction, and Stellent and Optika intend
to mail a joint proxy statement/prospectus to their respective
shareholders in connection with the transaction. Investors and
security
holders of Stellent and Optika are urged to read the joint proxy
statement/prospectus when it becomes available because it will
contain important information about the companies and the transaction.
Investors and security holders may obtain a free copy of
the joint proxy statement/prospectus (when it is available) on
the SEC’s Web site at www.sec.gov. A free copy of the joint
proxy statement/prospectus may also be obtained from either of
the companies. In addition to the registration statement and the
joint proxy
statement/prospectus, each company files 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
room located at 450 5th Street, N.W., Washington, D.C., 20549,
or any of the SEC’s other public reference rooms located
in New York and Chicago. Investors should call the SEC at 1-800-SEC-0330
for further information on these public reference rooms. These
SEC filings are also available for free on the SEC’s Web
site at www.sec.gov. A free copy of these filings may also be obtained
from either company.
Information Concerning Participants
Each of the companies and their respective executive officers and
directors may be deemed to be participants in the solicitation
of proxies from their respective shareholders in favor of the transaction.
Information about the directors and executive officers of
Stellent may be found in Stellent’s definitive proxy statement
for its 2002 annual meeting of shareholders and in Stellent’s
annual report on Form 10-K for the fiscal year ended March 31,
2003. Information about the directors and executive officers of
Optika may be
found in Optika’s definitive proxy statement for its 2003
annual meeting of shareholders and in Optika’s annual report
on Form 10-K for the fiscal year ended Dec. 31, 2002. In addition,
information regarding the interests of Optika’s
officers and directors in the
transaction will be included in the joint proxy statement/prospectus.
Stellent Universal Content Management Features
Stellent Universal Content Management provides a single product
architecture offering Web content management, document management,
collaboration, records management and digital asset management
functionalities. The system enables organizations of all sizes
within a broad range of industries to implement Web-based line-of-business
initiatives, such as employee portals and partner extranets, as
well as enterprise-wide initiatives that standardize content management
for use by multiple sites and applications throughout an organization.
These initiatives help customers increase employee productivity,
reduce expenses, improve company-wide collaboration and communication,
and often completely transform the way they do business. For information
on how to obtain Stellent Universal Content Management, contact
Stellent at 1-800-989-8774.
About Stellent, Inc.
Stellent, Inc. (www.stellent.com) is a global provider of content
management solutions. The company’s Stellent Content Management
system enables customers to rapidly deploy line-of-business Web
sites, such as employee portals and partner extranets, as well
as enterprise-wide solutions that standardize content management
for use by multiple sites and applications throughout an organization.
Stellent has been ranked one of the top three content management
vendors by industry analyst firms Gartner Dataquest, Giga Information
Group and Aberdeen Group, and has more than 1,500 customers, including
much of the Global 2000. Its customer roster includes Procter & Gamble,
Merrill Lynch, Los Angeles County, British Red Cross, ING, Target
Corp., Janus, Emerson Process Management and various BlueCross
BlueShield organizations across 15 states. Stellent is headquartered
in Eden Prairie, Minn. and maintains offices throughout the United
States, Europe and Asia-Pacific.
About Optika
Headquartered in Colorado Springs, Colo., Optika Inc. is a leading
provider of imaging, workflow, collaboration and records management
software. Optika’s
AcordeTM family of Enterprise Content Management (ECM) solutions
allows companies to streamline their business processes, eliminate
paper and increase operational efficiencies. The company’s
more than 2,000 customers worldwide include The Home Depot, Merrill
Lynch, Georgia- Pacific, Bayer Corp., Turner Broadcasting Systems,
Airborne Express and SBC
Communications. For more information about Optika and the Acorde
product family, contact the company at 719-548-9800 or visit www.optika.com.
Revolution Partners is one of the nation's largest investment banks focused exclusively on Mergers & Acquisitions and Private Capital Fundraising Advisory Services for technology companies. All of our clients benefit from senior-level attention from partners with deep sector expertise.
Revolution Partners was founded in 2001 by former senior technology bankers from major Wall Street investment banks. With offices in Boston, San Francisco and Los Angeles, Revolution applies partner-level experience to the successful execution of advisory and financing transactions for emerging technology companies in industry sectors including software, Internet business services, telecommunications, wireless, clean tech, digital media, storage and semiconductors. For more information, visit www.revolutionpartners.com. |
