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Filed by WebTrends Corporation
Pursuant to Rule 425 Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Exchange Act of 1934
Subject Company: WebTrends Corporation
Commission File No. 000-25215
PRESS RELEASE
NETIQ AND WEBTRENDS AGREE TO MERGE
STRATEGIC COMBINATION WILL LEVERAGE COMPLEMENTARY STRENGTHS TO CREATE
THE LEADING PROVIDER OF EBUSINESS INFRASTRUCTURE MANAGEMENT AND
INTELLIGENCE SOLUTIONS
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SAN JOSE, CA, AND PORTLAND, OR -- JAN. 17, 2001 -- NetIQ(R) Corp.
(NASDAQ: NTIQ), the market leader in Windows eBusiness infrastructure
management, and WebTrends(R) Corp. (NASDAQ: WEBT), the market leader in web
analytics and eBusiness intelligence, today announced a definitive merger
agreement, creating the leading provider of eBusiness infrastructure management
and intelligence solutions.
The combined company will be uniquely positioned to provide enterprise
organizations, eBusinesses and service providers the most comprehensive
infrastructure management and intelligence solutions for all the components of
their eBusiness infrastructure -- from back-end servers, networks and
directories to front-end web servers and applications. The resulting product
portfolio will include product lines for systems administration, network
performance management, operations management, security management, web
management, and eBusiness analytics and intelligence.
Under the terms of the transaction, which was approved by the boards of
directors of both companies, WebTrends shareholders will receive 0.480 shares of
NetIQ common stock for each WebTrends common share. Based on NetIQ's closing
price of $75.00 on Tuesday, January 16, 2001, the transaction is valued at
$36.00 per WebTrends share, or a total of approximately $1 billion. On a fully
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diluted basis, NetIQ shareholders will own approximately 76% of the company and
WebTrends shareholders will own approximately 24%. With the combination, NetIQ
will have a market capitalization in excess of $4 billion, pro forma calendar
2000 revenues of approximately $160 million, more than 52,000 customers and
about 1,000 employees. The combined company will operate under the name NetIQ
Corporation.
"Building on the successful merger of NetIQ and Mission Critical and
other recent strategic moves, this combination is the logical next step in our
strategy to become the unparalleled leader in eBusiness infrastructure
management and intelligence solutions," said Ching-Fa Hwang, chief executive
officer of NetIQ. "By joining forces with WebTrends, we will significantly
enhance our offering and deliver the most comprehensive solution for managing
both Windows- and non-Windows-based platforms such as Linux and Sun Solaris,
applications and devices, and Internet-based systems."
Eli Shapira, currently WebTrends chief executive officer, who will
become chief strategy officer for NetIQ, stated, "This combination is a
strategic fit that brings together two leaders focused on helping companies
increase the return from their eBusiness initiatives, from NetIQ's comprehensive
infrastructure management through WebTrends' Visitor Relationship Management
solutions. Simply stated, this combination will result in greatly enhanced
offerings for our more than 52,000 collective customers, increased business
opportunities with partners, significant value creation for our shareholders and
compelling opportunities for all our employees."
Shapira will join NetIQ's Board of Directors. Glen Boyd, currently
president and chief technology officer of WebTrends, will become chief
information officer of NetIQ, and Dan Meub, currently chief operating officer of
WebTrends, will become senior vice president of WebTrends products at NetIQ.
The combined company will be headquartered in San Jose, CA, with
development and operational personnel located in Houston, TX, Raleigh, NC and
Bellevue, WA. NetIQ will also maintain significant operations in Portland, OR,
where WebTrends is headquartered.
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The transaction, which will be accounted for as a purchase and is
anticipated to be tax-free to the shareholders of both companies, is expected to
close late in the first calendar quarter or early in the second quarter, subject
to regulatory approvals, approval by the shareholders of both companies, and
customary closing conditions. The holders of approximately 30% of WebTrend's
outstanding shares have agreed to vote their shares in favor of the merger. The
transaction is expected to be accretive to NetIQ's earnings per share beginning
in the June quarter excluding non-cash acquisition related charges, if any,
arising from the merger.
NetIQ and WebTrends will host an analyst/investor conference call today,
Wednesday, January 17, 2001 at 8:30 a.m. (EST) to discuss the proposed merger
between the two companies. Individuals calling from the United States can access
the call by dialing 888-769-8925 at 8:20 a.m. (EST). International callers
should dial 312-470-7391. The name of the call and pass code is NetIQ and
WebTrends. Media are invited to join the call in a listen-only mode.
NETIQ/WEBTRENDS EARNINGS ANNOUNCEMENTS
NetIQ will issue its second quarter of fiscal year 2001 earnings
announcement on Thursday, January 18, 2001 following the stock market close.
Ching-Fa Hwang, President and CEO, and Jim Barth, Senior Vice President and CFO
will review second quarter earnings in a teleconference call at 4:30 PM EST.
WebTrends will release its fourth quarter 2000 and year-end results on Tuesday,
January 23, 2001 following the stock market close. Eli Shapira, Chairman and CEO
and Jim Richardson, Senior Vice President and CFO will review the results with
the investment community in a teleconference at 5:00 PM EST that afternoon. Both
companies expect to report results exceeding consensus revenue and earnings
estimates for the quarter.
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ABOUT WEBTRENDS
Founded in 1993, WebTrends Corporation (Nasdaq:WEBT) is the leading
provider of Visitor Relationship Management and eBusiness Intelligence solutions
for Internet and intranet servers and firewalls. WebTrends offers organizations
a comprehensive set of solutions to improve the return on investment from
eBusiness initiatives. The company is headquartered in Portland, OR. For more
information, please visit WebTrends' Web site at http://www.webtrends.com or
call 503-294-7025.
ABOUT NETIQ
NetIQ (Nasdaq:NTIQ) is a leading provider of e-business infrastructure
management software encompassing application, directory, server and network
performance management. The company is headquartered in San Jose, Calif., with
development and operational personnel in Houston, TX; Raleigh, N.C.; and
Bellevue, WA. For more information, please visit NetIQ's Web site at
http://www.netiq.com/ or call 408-856-3000.
# # #
All referenced product names are trademarks of their respective companies.
SAFE HARBOR STATEMENT
Statements in this press release other than statements of historical fact are
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The companies' actual future results could differ
materially from the results discussed herein. Factors that could cause or
contribute to such differences include the risks inherent in acquisitions of
technology businesses including the successful consummation of the merger and
integration of the companies, the timing and successful development of
technology; the ability to retain key management and hire technical personnel
and other employees; changing relationships with customers, suppliers and
strategic partners; unanticipated costs associated with development and
marketing activities; customer acceptance of new product offerings; pricing of
new products, and competition in our various product lines. For a more complete
discussion of risks and uncertainties for each company see the section entitled
"Factors That May Affect Future Results" in the NetIQ annual report on Form
10-K, and "Risk Factors" in the WebTrends annual report on Form 10-K as filed
with the Securities and Exchange Commission.
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CONTACTS:
FOR NETIQ:
Susan Torrey, Press Relations, 713-962-1888, [email protected]
Jim Barth, Chief Financial Officer, 408-856-3069, [email protected]
FOR WEBTRENDS:
Bill Schneider, Press Relations, 503-294-7025 x 2362, [email protected]
Nanci Werts, Investor Relations, 503-294-7025 x 2564 [email protected]
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Conference Call Script
INTRODUCTION AND SAFE HARBOR - JIM BARTH
o Good morning, this is Jim Barth, NetIQ's CFO. Thank you all for joining us
this morning on such short notice to discuss what is truly exciting news.
Earlier today, we issued a press release announcing the strategic merger
of NetIQ and WebTrends. For those of you who have not yet seen the
release, a copy is available on either of our corporate websites.
o With me today are Ching-Fa Hwang, CEO of NetIQ, Eli Shapira, CEO of
WebTrends and Jim Richardson, CFO of WebTrends. Tom Kemp, our senior vice
president of products, will also be joining us during the questions and
answer session.
o Before I turn the call over to Ching, I need to caution all listeners that
statements in this press release and answers to questions other than
statements of historical fact are "forward-looking" statements within the
meaning of the private securities litigation reform act of 1995. Although
we believe that the expectations reflected in such forward-looking
statements are reasonable, we can give no assurance that the expectations
reflected in such forward-looking statements will prove to be correct.
o The companies' actual future results could differ materially from the
results discussed herein. Factors that could cause or contribute to such
differences include the risks inherent in acquisitions of technology
businesses including the successful consummation of the merger and the
integration of the companies, the failure of the transactions to close due
to regulatory obstacles or other factors, the timing and successful
completion of technology and product development, the ability to retain
key management and hire key executives, technical personnel and other
employees, changing relationships with customers, suppliers and strategic
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partners, unanticipated costs associated with integration activities, as
well as customer acceptance of new product offerings, and competition in
the companies' various product lines. For a more complete discussion of
risks and uncertainties see the section entitled "Risk Factors" in NetIQ's
and WebTrends' annual reports on form 10-K, as filed with the Securities
and Exchange Commission.
o Now, I'd like to turn the call over to Ching.
Ching
o Thanks, Jim. I'm thrilled to be here today with my new colleagues to
discuss a truly compelling opportunity for NetIQ, WebTrends, and their
shareholders, customers and employees. Eli, Jim Barth and I would like to
spend the next few minutes providing additional context to this
announcement, and then we'll be happy to take your questions.
o Today's news is truly exciting. Simply stated, The combination of NetIQ
and WebTrends leverages the companies' complementary strengths to create
the leading player of e-business infrastructure management and
Intelligence .......and we're thrilled to be joining forces with such a
first-rate organization.
o From a purely macro-standpoint, the combined company will have
significantly greater size and scale - with a market cap. in excess of
approximately $4 billion. More importantly the combined company will have
a greater product scope, reach and depth.
o From a strategic standpoint, the combination is a superb fit. Both
companies have a tremendous amount of momentum and are market leaders in
their respective spaces - NetIQ in Windows eBusiness infrastructure
management, and WebTrends in web analytics and eBusiness intelligence. Two
areas that have natural synergies.
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o Together, the company will be uniquely positioned to provide enterprise
organizations, eBusinesses and service providers the most comprehensive
infrastructure management and intelligence solutions for all the
components of their eBusiness infrastructure -- from the back-end servers,
networks and directories to the front-end web servers and applications. We
will exclusively have a full suite of product lines for systems
administration, operations management, network performance management,
security management, web management and eBusiness analytics and
intelligence.
o To date, both NetIQ and WebTrends have demonstrated solid growth and
delivered strong performance. This transaction is simply the next logical
step in the evolution of both companies. For us, it builds on NetIQ's
successful merger with Mission Critical, furthering the company's strategy
to become the unparalleled leader in the eBusiness infrastructure
management and intelligence arena.
o From a product strategy perspective, we have been focused on not only
providing the most comprehensive management and monitoring of eBusiness
infrastructures, but providing value beyond management and monitoring by
enhancing our products in the areas of advanced reporting and analytics
concerning system and application usage. More specifically, we have been
very focused recently on delivering advanced reporting and analytics of
email servers the development of AppAnalyzer for Microsoft Exchange, and
through support of advanced reporting capabilities in AppManager.
o The merger with WebTrends and their strong VRM reporting and analytics
platform significantly accelerates the implementation and delivery of
NetIQ's vision by providing to NetIQ both market-leading products and
technology for faster time to market.
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o For WebTrends, as Eli will comment on in more detail, it provides a richer
platform and more resources more rapidly evolve the enterprise eBusiness
analytics and intelligence solutions.
o There is no doubt that Webtrends is the leader in their field - with
unique strengths in security management and Web analytics and eBusiness
Intelligence .........key areas that provide us with the missing link -
"the intelligence" - to extract and add value to the underlying elements
of eBusiness management. WebTrends has successfully evolved into an
organization whose majority of revenue comes from enterprise class
products, which complements our sales and distribution channels.
o In addition this transaction is financially compelling - and will create
significant value for shareholders of both companies. It is expected to be
immediately accretive to NetIQ's earnings per share beginning in the June
quarter before giving effect to amortization charges from the merger.
o Furthermore, there is significant growth potential as the combined company
capitalizes on considerable cross-selling opportunities from the
complementary nature of our product offerings, customer bases,
distribution strategies and brand recognition.
o In addition to NetIQ's headquarters in San Jose, CA - and development and
operations in Houston, Texas; Raleigh, North Carolina; and Bellevue,
Washington - the company will maintain a significant development and
operations in Portland, Oregon, where WebTrends is headquartered.
o On the management side, Eli will serve the merged company as chief
strategy officer and will become a member of the Board of Directors. In
addition, Glen Boyd, currently president and chief technology officer of
WebTrends, will become chief information officer of NetIQ, and Dan Meub,
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currently chief operating officer of WebTrends, will become senior vice
president of WebTrends products.
o With that, I'd like to turn the call over to my new colleague, Eli
Shapira, to add his perspective. Eli.
ELI SHAPIRA
o Thank you Ching. I'd like to begin by saying that I am equally excited
about this transaction - the combination is truly an ideal strategic and
cultural fit...two key ingredients for making the decision to join the two
organizations.
o The merger of WebTrends and NetIQ joins two leaders in their fields who
are primed and ready to capitalize on tremendous synergistic opportunities
we have in products technologies, distribution and customers.
o As a combined company, we will be able to offer customers the only
`end-to-end' solution for managing Windows- and non-Windows-based
platforms such as Linus and Sun Solaris, applications and devices and
Internet-based systems.
o With the ability to offer "one-stop-shopping" for customers and true
category-defining size, we believe that we are uniquely positioned to take
advantage of market trends. Just to again give you some quick perspective
- according to industry research, the worldwide Internet server market is
expected to grow from $13 billion in 1998 to $38 billion in 2001. And, in
the eCommerce market, spending on software and services is expected to
grow to $35 billion in 2002, nearly six times the $6 billion spent in
1998.
o As Ching mentioned, the combination will result in a company with
significantly greater size and scope. The combined company is expected to
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report pro forma calendar 2000 revenues of approximately $160 million,
approximately 100,000 products sold to more than 50,000 customers, over
50% of which are Fortune 500 and Global 2000 companies, and about 1,000
employees.
o Furthermore, we will have a product portfolio encompassing many of the top
brand names in the industry, including WebTrends and NetIQ AppManager.
o In short, this combination will result in greatly enhanced offerings for
our collective customers, significant value creation for our shareholders
and compelling opportunities for all of our employees.
o We have a clear vision for integrating these organizations and are very
committed to maximizing the potential of the combination. To that end, we
are in the process of putting a team and plan together, so that we can
begin implementing it as soon as the transaction closes.
o There is obviously a lot to do as we seamlessly execute on our collective
vision - but I'm confident we've got the right talent, the right energy
levels and the right mindset to deliver on this combination's potential.
With that, I'll ask Jim Barth to provide a few additional financial
details related to the merger. Jim?
JIM BARTH
o Thanks, Eli. I will spend just a few minutes recapping the terms of the
agreement.
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o Under the terms of a definitive merger agreement between NetIQ and
WebTrends, which was unanimously approved by the board of directors of
each company, WebTrends shareholders will receive 0.480 shares of NetIQ
common stock for each WebTrends common share.
o Based on NetIQ's closing price of $75.00 on Tuesday, January 16, 2001, the
transaction is valued at $36 per WebTrends share, or a total of
approximately $One billion. On a fully diluted basis, NetIQ shareholders
will own approximately 76% of the company and WebTrends shareholders will
own approximately 24%.
o The merger, which will be accounted for as a purchase and is expected to
be tax-free to the shareholders of both companies, is subject to
regulatory approvals as well as approval by the shareholders of both
companies, and customary closing conditions. We expect to complete the
transaction by the end of the first calendar quarter, or early in the
second calendar quarter.
o Following the close of the transaction there will be approximately 52.3
million primary shares outstanding and approximately 57 million diluted
shares, based on outstanding shares December 31, 2000.
o The transaction will result in significant goodwill, which will be
amortized to expense over several years. We expect to compute the total
amount of goodwill, and the charge to operations by the date of closing.
o Combined total tangible assets at December 31 were more than $530 million,
including cash of more than $430 million.
o As Eli mentioned, revenue for the combined companies was more than $160.
This does not include revenue of Mission Critical Software and Ganymede
Software prior to the merger wih NetIQ in May 2000. Including those
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revenue as well, combined revenues were more than $180 million for the
calendar year ended December, 31, 2000.
o Our combined quarterly revenues have increased more than 90% year over
year and were more than $57 million on a combined basis for the quarter
ended December 31, 2000. Together, we are achieving a gross margin of more
than 92% and an operating profit of more than 15% of combined revenue,
excluding amortization of goodwill and other intangibles, amortization of
stock-based compensation and other acquisition-related charges.
o The combination is expected to be accretive to the shareholders of NetIQ
immediately following the closing.
o Now, before I turn the call back over to Ching I wanted to inform you of
NetIQ and WebTrends upcoming earnings announcements. NetIQ will issue its
second quarter of fiscal year 2001 earnings announcement on Thursday,
January 18, 2001 following the stock market close. Ching-Fa Hwang,
President and CEO, and Jim Barth, Senior Vice-President and CFO will
review second quarter earnings in a teleconference call at 4:30 PM EST.
WebTrends will release its fourth quarter 2000 and year-end results on
Tuesday, January 23, 2001 following the stock market close. Eli Shapira,
Chairman and CEO and Jim Richardson, Senior Vice-President and CFO will
review the results with the investment community in a teleconference at
2:00 PM PST that afternoon. Both companies are expected to report results
meeting or exceeding consensus earnings expectations.
o Now I would like to turn it back over to Ching.
CHING-FA HWANG
o Thank you Jim.
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o I firmly believe that the two organizations are a superb fit from both
market and corporate culture standpoint. We look forward to working with
our new colleagues.
o The strategic rationale is very clear. Each company is the market leader
in its respective space. Both companies have highly complementary product
offerings, providing considerable cross-selling opportunities. This is as
a unique value proposition and a great opportunity to capture the overall
e-business infrastructure management market.
o I can assure you we will be sharply focused on the integration and
management of this organization for growth and increasing shareholder
value.
o Thank you. We are now happy to address your questions.
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NetIQ Corporation, its officers and directors may be deemed to be
participants in the solicitation of proxies from NetIQ's shareholders with
respect to the transactions contemplated by the merger agreement. Information
regarding such officers and directors is included in NetIQ's proxy statement
filed with the SEC on October 6, 2000. This document is available free of charge
at the SEC website at www.sec.gov and from the NetIQ Corporation contact listed
below.
WebTrends Corporation, its officers and directors may be deemed to be
participants in the solicitation of proxies from WebTrends shareholders with
respect to the transactions contemplated by the merger agreement. Information
regarding such officers and directors is included in WebTrends' proxy statement
filed with the SEC on April 4, 2000. This document is available free of charge
at the SEC website at www.sec.gov and from the WebTrends contact listed below.
SHAREHOLDERS OF WEBTRENDS AND NETIQ ARE URGED TO READ THE PROXY STATEMENT-
PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM S-4 TO BE FILED BY
NETIQ AND WEBTRENDS WITH THE SECURITIES AND EXCHANGE COMMISION BECAUSE IT
CONTAINS IMPORTANT INFORMATION. UPON FILING WITH THE SEC, THIS DOCUMENT IS
AVAILABLE FREE OF CHARGE ON THE SEC WEBSIDE AT WWW.SEC.GOV AND FROM WEBTRENDS
CORPORATION AND NETIQ CORPORATION THROUGH THE CONTACTS LISTED BELOW.
Contacts:
For WebTrends Corporation
Bill Schneider, Press Relations
(503) 294-7025 ext. 2362
[email protected]
Nanci Werts, Investor Relations
(503) 294-7025 ext. 2564
[email protected]
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NetIQ Corporation
Susan Torrey, Press Relations
(713) 548-1863
[email protected]
James A. Barth, Chief Financial Officer
(408) 856-3000
[email protected]
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