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Rule 425
SEC File No. 000-27269
Investors are urged to read documents relevant to the acquisition described
in this announcement that are filed with or that will be filed with the U.S.
Securities and Exchange Commission because they contain important information
about the acquisition. After they are filed, you can obtain the relevant
documents that are filed with the Securities and Exchange Commission for free
on the Securities and Exchange Commission's web site at http://www.sec.gov.
If you write or call us, we will send you for free, when available, the
prospectus that we file in connection with the registration of the shares to
be issued in the acquisition. You can call us at (617) 960-3400 or write to
us at:
Breakaway Solutions, Inc.
50 Rowes Wharf, Sixth Floor
Boston, MA 02110
Attention: Investor Relations
FOR FURTHER INFORMATION CONTACT:
Joanna Bolles Ken Peters/Michelle Beaudreau
Public Relations Manager PAN Communications
Breakaway Solutions, Inc. (978) 474-1900
(617) 960-3458 [email protected]
[email protected] [email protected]
BREAKAWAY SOLUTIONS TO ACQUIRE EGGROCK PARTNERS
LEADING FULL SERVICE PROVIDER OF E-BUSINESS SOLUTIONS
DOMINATES GROWING ENTERPRISE MARKET
BOSTON, MA -- January 27, 2000 -- In a strategic move to increase its leadership
role in providing e-business solutions for the growing enterprise, Breakaway
Solutions, Inc. (NASDAQ: BWAY), a leading Full Service Provider of strategy,
e-business implementation, and application hosting solutions to growing
enterprises, today announced it has signed a definitive agreement to acquire
Eggrock Partners, a systems integrator, consulting firm and application service
provider (ASP) for growing enterprise e-businesses. Breakaway Solutions will
issue 3.636 million shares of common stock in an all-stock merger transaction,
which will provide Eggrock shareholders 12.6% ownership of the combined entity
on a fully diluted basis. The consideration at the time of the signing of the
definitive agreement was approximately $250 million.
Together, Breakaway Solutions and Eggrock Partners are poised to take advantage
of the unparalleled growth projected for e-business consulting. The acquisition
brings together two companies that share synergies in culture, philosophy,
methodology and background.
- - Both Breakaway Solutions and Eggrock Partners focus on providing a full
range of e-business solutions for growing enterprises in the
business-to-business marketplace.
- - Forrester Research has predicted that growing enterprises will account for
53 percent of the overall spending on eCommerce services in the year 2000,
growing from just 15 percent two years ago. Breakaway Solutions is the only
publicly-traded company dedicated to serving this market, and with the
addition of Eggrock Partners, the company furthers its dominance of
e-solutions for the middle market.
- - The companies are each led by former executives who successfully
collaborated for many years while at Cambridge Technology Partners. This
type of management team familiarity and synergy significantly reduces the
risks of acquisition.
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- - The addition of Eggrock Partners employees brings the Breakaway Solutions
headcount to 516 people, an increase of 58% in the company's billable
headcount. As a result, the acquisition adds economies of scale which will
allow Breakaway Solutions to service more clients. An increased number of
employee teams at senior and middle management levels will also give the
company expanded bandwidth to enter Europe later this quarter, one year
ahead of schedule.
- - Both companies share the philosophy that the most effective way to deliver
results for growing enterprises is through the Full Service Provider model
supported by Solution Centers. The FSP model delivers solutions from
business strategy to technology implementation and application hosting.
- - The acquisition also expands Breakaway Solutions' regional office network
and adds two new Solution Centers in Boca Raton and Minneapolis, which
completes the company's Solution Center build-out for the US.
"There is a common vision between the two companies and the way we approach our
business through our culture, methodology, recurring revenue business model and
the commitment we share to the growing enterprise," said Gordon Brooks,
president and CEO of Breakaway Solutions. "By joining forces now, and focusing
our combined resources on our Full Service Provider model, we'll be
unstoppable."
Eggrock Partners has been offering application hosting solutions through their
eCo-Share services. Eggrock's customers will now be able to take advantage of
Breakaway Solutions' application hosting capabilities, through Breakaway's 11
high-availability data centers located in the U.S., Europe and Asia.
"I am extremely proud of the success we have had in growing Eggrock Partners
over 100% this past year and in offering our customers world-class e-solutions,"
said Maureen Ellenberger, president and CEO of Eggrock Partners. "By joining
forces now with Breakaway Solutions, we are accelerating the revolution of how
growing enterprises conduct business on the Web."
The three founders of Eggrock Partners were previously at Cambridge Technology
Partners, where they worked closely with Gordon Brooks as well as other members
of Breakaway's management team. Maureen Ellenberger will become Vice President
and Chief Innovation Officer at Breakaway Solutions. Mike Mordas will become
Chief Relationship Officer, working closely with the company's client partners.
Vijay Manwani will become Chief Technology Officer for the combined
organization.
"These two companies have so much in common that I really saw them as a natural
fit," said Thomas Willmott, president and CEO of Aberdeen Group. "The market for
e-business solutions for growing enterprises is expanding at a rapid rate and
the marriage of these two firms puts Breakaway Solutions in a strong position to
capitalize on that growth."
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Breakaway Solutions will account for the transaction using purchase accounting
and expects to close the acquisition in April, 2000, subject to customary
closing conditions and the effectiveness of a Registration Statement on Form S-4
covering the Breakaway Solutions stock to be issued.
BREAKAWAY SOLUTIONS WILL HOST A CONFERENCE CALL ON THURSDAY, JANUARY 27, 2000 AT
12 P.M. EST. ALL INTERESTED PARTIES SHOULD DIAL IN TO: (800) 288-8974. AN
ACCOMPANYING WEB PRESENTATION WILL BE DISPLAYED AT WWW.BREAKAWAY.COM.
ABOUT EGGROCK PARTNERS
Eggrock Partners is a leading systems integration consulting firm and ASP with
an innovative approach to the delivery, implementation and support of
customer-centered Web-based solutions for the emerging enterprise. From
e-commerce to customer management to financial systems and business
intelligence, Eggrock builds real-world, Web-based solutions using best-of-breed
software applications that are based on the Microsoft technology foundation.
Eggrock's clients are fast-growing companies seeking to capture and retain
customers, manage growth and compete globally. Using a shared-risk business
model, Eggrock is committed to providing solutions that minimize implementation
costs and maximize short and long-term return on investment. Eggrock is a
rapidly growing company, headquartered in Concord with offices in Boca Raton,
Washington, DC, and Minneapolis. For more information, call 888.344.3793, email
[email protected] or visit the Eggrock Partners' web site at
HTTP://WWW.EGGROCK.COM.
ABOUT BREAKAWAY SOLUTIONS
Breakaway Solutions, Inc. (NASDAQ: BWAY), is a Full Service Provider (FSP) of
e-business solutions that allow growing enterprises to capitalize on the power
of the Internet. Breakaway Solutions offers strategy, e-business implementation,
and application hosting solutions optimized for growing enterprise clients.
Headquartered in Boston, Mass., Breakaway Solutions has a network of regional
offices and Internet Solutions Centers in major cities across the U.S., as well
as 11 Application Hosting facilities in North America, Europe, Asia and
Australia. Breakaway Solutions can be reached at 617/960-3400 or at
WWW.BREAKAWAY.COM.
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Except for the historical information contained in this announcement, the
matters discussed in this announcement are "forward-looking statements" (as that
term is used in the Private Securities Litigation Reform Act of 1995) that
involve risks and uncertainties, including risks relating to personnel
retention, ability to realize benefits from acquisitions, equity dilution,
business change, product acceptance and customer demand, and growth management
detailed from time-to-time in Breakaway Solutions, Inc.'s filings with the
Securities and Exchange Commission. Breakaway Solutions, Inc. draws the reader's
attention to the factors described in its Quarterly Report on Form 10-Q/A for
the Period Ended September 30, 1999 under the heading "Factors That May Affect
Future Results." Any such forward-looking statements speak only as of the date
such statements are made, and the company undertakes no obligation to publicly
release the results of any revision to these forward-looking statements or
otherwise update or supplement this announcement or the risk factors contained
herein.
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