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TELETECH TO ACQUIRE NEWGEN RESULTS CORPORATION
TeleTech Acquires B2B Enterprise Channel Management Services Provider
in $200 Million Transaction
DENVER, Aug. 22 /PRNewswire/ -- TeleTech (Nasdaq: TTEC), the leading
global provider of eCommerce-enabling customer management solutions (eCRM),
today announced a definitive agreement to acquire Newgen Results Corporation
(Nasdaq: NWGN) 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
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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. The replay will also be available for 90 days
via TeleTech's web site at < http://www.teletech.com > and Newgen's web site at
< http://www.ngresults.com >.
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 more
information, call 800-7NEWGEN or visit < http://www.ngresults.com >.
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.
Information regarding TeleTech Holdings can be found on the Worldwide
Web at < http://www.teletech.com >.
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FORWARD LOOKING STATEMENTS
All statements not based on historical fact are forward-looking
statements that involve substantial risks and uncertainties. In accordance with
the Private Securities Litigation Reform Act of 1995, following are important
factors that could cause TeleTech's actual results to differ materially from
those expressed or implied by such forward-looking statements: difficulties and
unforeseen costs may arise in the integration of TeleTech's and Newgen's
operations and marketing efforts, which could adversely affect revenue and
results of operations; compatibility and potential integration difficulties
between the operating systems, software or hardware of TeleTech and Newgen could
adversely impact TeleTech's operations; and TeleTech's ability to penetrate new
markets, including but not limited to TeleTech's ability to continue expansion
into the electronic channel management space generally may be adversely affected
by integration efforts, customer interest and delays in technology development.
Readers are encouraged to review TeleTech's 1999 Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q, for first and second quarters 2000, which
describe other important factors that may impact TeleTech's business, results of
operations and financial condition.
TeleTech, Newgen and their respective executive officers and directors
may be deemed to be participants in the solicitation of proxies from Newgen
stockholders with respect to the transactions contemplated by the Merger
Agreement. Information regarding TeleTech, TeleTech's officers and directors,
including beneficial ownership information, is included in TeleTech's Annual
Report on Form 10-K for the year ended December 31, 1999 filed with the SEC on
March 29, 2000. This document is available free of charge at the SEC web site
(http://www.sec.gov < http://www.sec.gov >) and from TeleTech. Information
regarding Newgen, Newgen's officers and directors is included in Newgen's Annual
Report on Form 10-K for the year ended December 31, 1999 filed with the SEC on
March 30, 2000. This document is available free of charge at the SEC web site
(http://www.sec.gov < http://www.sec.gov >) and from Newgen.
This news release shall not constitute an offer of any securities for
sale. TeleTech and Newgen will prepare and file a Proxy Statement/Prospectus
with the Securities and Exchange Commission. Copies of that document will be
provided to Newgen's stockholders. In addition, that document and other relevant
documents concerning the transaction will be filed with the SEC and copies will
be available free of charge from the SEC's web site (http://www.sec.gov
< http://www.sec.gov >) and from TeleTech and Newgen. The Proxy
Statement/Prospectus will contain important information, and stockholders of
Newgen are urged to read it once it becomes available. All stockholders of
Newgen should read the Proxy Statement/Prospectus carefully when it becomes
available before making any voting or investment decisions.
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