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Filed by Kana Communications, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 of the
Securities Exchange Act of 1934
Subject Company: Silknet Software Inc.
Commission File No. 000-25491
ON FEBRUARY 7, 2000, KANA COMMUNICATIONS, INC., A DELAWARE CORPORATION, AND
SILKNET SOFTWARE INC., A DELAWARE CORPORATION, JOINTLY ISSUED THE FOLLOWING
PRESS RELEASE:
REPORTERS NOTE: A media teleconference is scheduled for Monday, February 7 at
7:30 a.m. PT/10:30 a.m. ET. Domestic dial-in: 1-800-260-0702 and International:
651-224-7472. The teleconference call name is "Kana Communications"
FOR IMMEDIATE RELEASE
KANA AND SILKNET SIGN LANDMARK MULTI-BILLION DOLLAR MERGER
Two of the fastest growing public software companies unite in one of the
industry's largest
e-business software deals
REDWOOD CITY, CA & MANCHESTER, NH - February 7, 2000 - Kana Communications, Inc.
(www.kana.com), a leading provider of online customer communications solutions
for marketing, sales and service, and Silknet Software Inc. (www.silknet.com), a
leading provider of customer-centric e-business applications and systems, two of
the industry's fastest growing public e-business software companies, today
announced the signing of a merger agreement valued at $4.2 billion dollars. This
represents one of the largest e-business software mergers to date. With this
merger, Kana will take online customer communications to a new level by adding
Silknet's comprehensive customer-facing e-business platform and applications to
Kana's existing solutions for marketing, sales and service. Customer-facing
applications are unique in that they allow customers, including consumers,
employees or partners, to view their relationship with an e-business such as
their preferences, support requests, sales questions and order status. E-
businesses will be able to rely on Kana to proactively connect customers and
partners together, increasing revenue, decreasing costs and building customer
loyalty - fundamentally changing how e-businesses relate to their customers.
Under the terms of the definitive merger agreement, each outstanding share of
Silknet common stock will be exchanged for 0.83 shares of Kana common stock,
which represents a 21% premium over the average exchange ratio for the last 30
days. In addition, all outstanding options
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and warrants to purchase Silknet
common stock will be assumed by Kana, adjusted for the exchange ratio. On a
fully diluted basis, Kana will issue (or reserve) approximately 16.4 million
shares of its common stock having a value of approximately $4.2 billion based on
Kana's closing stock price on February 4, 2000. This represents 33.7% of the
combined company.
Since its founding, Kana has developed solutions that allow e-businesses to
build their communications infrastructure around a singular focus: the customer.
Its unique online customer communications solutions have established a
leadership position for Kana in the growing e-business communications
marketplace. The combined company will extend this leadership position with a
combined customer list of approximately 450 leading e-businesses that includes
Microsoft, Williams-Sonoma, E*TRADE, and eBay. Kana's customers consist of 12
of the top 20 most trafficked Web sites, many of the leading Fortune 500 e-
businesses, and four of the top five e-commerce sites (Media Metrix, November
1999). Kana and Silknet's rapid growth has resulted from the solutions they
developed from the ground up to meet the specific needs of e-business, including
a Web-based architecture, scalability and the integration of online and
traditional communications channels. The combined company will employ more than
600 people worldwide - including over 200 in research and development and
approximately 200 in sales and marketing. Additionally, the company will be
able to leverage significant operations on both the west and east coast, the key
technology hubs of North America, as well as global sales and services teams.
"This combination enables Kana to expand our leadership by providing a web-
architected e-business platform and a comprehensive suite of
customer-facing applications for marketing, sales and service communications,"
commented Michael McCloskey, CEO of Kana. "We expect significant interest from
Kana's customers for Silknet's solutions as it represents a natural progression
in the development of an e-business infrastructure."
"Kana and Silknet share a common vision in building an e-business platform that
focuses on the customer," said Jay Wood, CEO of Silknet Software. "Kana's
industry leading online customer communications solutions, combined with our
unique customer-centric e-business applications and platform, delivers a
powerful means for our customers to proactively interact, transact and
communicate with their customers. The combined products will provide the
platform for linking business-to-consumer and business-to-business functions
within an e-business."
The transaction, which has been unanimously approved by both the Kana and
Silknet Boards of Directors, is subject to approval by Kana and Silknet
stockholders and certain other customary closing conditions.. Directors,
officers and certain affiliates representing approximately 43% of Silknet's
voting power and directors, officers and certain affiliates representing
approximately 51% of Kana's voting power have agreed to vote shares held by them
in favor of the merger and against competing proposals. The companies expect to
close the transaction in the second quarter of 2000. The transaction will be
accounted for as a purchase transaction and will be effected on a tax-free basis
to stockholders.
1. Market Opportunity
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According to a June 1999 Forrester Research report, more than eighty percent of
online merchants believe that a single integrated view of the customer across
the enterprise is critical or very important to their business. However, only
approximately two percent have implemented such a solution today.
E-businesses are struggling to realize the promise of e-commerce and recognize
that the key to do so is through comprehensive customer communications.
Currently, organizations are tasked with managing communications across multiple
channels - e-mail, Web, realtime messaging, and voice over the Internet to
phones and to storefronts. Kana will offer a streamlined solution that
integrates customer interactions and transactions across self-service and
collaborative communications channels. With the combined company, a single
vendor will address the complexities of e-business customer communications:
Kana.
2. The Combined Offering
Comprehensive customer-facing e-business platform and applications
The combination of Kana's online customer communications solutions and Silknet's
customer-centric e-business applications and systems will result in a Web-
architected e-business platform and a comprehensive suite of customer-facing
applications for marketing, sales and service communications. This allows e-
businesses to work with one vendor for their complete e-business customer
communications needs.
3. 360 degree view of customer communications across e-mail, Web, and
phone
The Kana platform manages the entire online customer communications lifecycle --
from marketing to sales to service. Kana's comprehensive offering enables e-
businesses to manage multiple contact channels, including outbound and inbound
e-mail, Web-based customer self-service, realtime messaging and voice over the
Internet.
With the addition of Silknet's eBusiness System, Kana will extend its solution
to include a robust, Web-based framework for enabling and managing personalized
interactions with customers, partners or employees across online and traditional
communication channels. From personalized marketing, sales, electronic commerce,
and customer support, this unique solution integrates customer interactions and
transactions across multiple online communication channels, as well as
traditional call center contact.
4. Improving the customer experience
Kana will improve the customer experience by providing a highly sophisticated
self-service solution for customers to help themselves get answers to their
questions. For more complex sales situations, the Kana solution will guide
customers through the sales process through the use of a virtual sales advisor.
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5. Personalized portal to the enterprise
The combined company will provide the ability for e-businesses to offer
customers a personalized portal to the enterprise, enabling unique, one-to-one
interactions and transactions. This allows e-businesses to give customers unique
views of all activity across the enterprise including their preferences, support
requests, sales questions and order status. In addition, a personal portal can
be used in business-to-business transactions to allow different permissions for
interacting and transacting with an e-business. For example, an e-business might
allow the director of a group to purchase new products and submit service
requests, but the group's members may only submit service requests and check
order status.
About Silknet Software, Inc.
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Silknet Software (NASDAQ:SILK) provides the industry's leading customer-centric
e-business applications and systems for Global 2000 and dot.com companies such
as Office Depot, Microsoft, Priceline.com, E*Trade, Beyond.com, Sprint,
Utility.com, Inacom and Bell Canada. Built from the ground up with Web
technologies and standards, Silknet's software allows companies to build strong
customer relationships through personalized marketing, sales, electronic
commerce and customer support services. Silknet's approach integrates all
customer interactions and data whether across the Web, by phone, through e-mail
or in person, providing the company's agents, partners and the customers with a
single view of their relationship. Silknet is headquartered in Manchester, N.H.,
with offices across North America and in Europe. Additional information can be
obtained on the World Wide Web at http://www.silknet.com or by calling Silknet
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at (603) 625-0070.
About Kana Communications, Inc.
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Kana Communications, Inc. (NASDAQ:KANA) is a leading provider of comprehensive
online customer communications solutions for marketing, sales and service. These
mission critical applications support multiple channels of online contact
including outbound and inbound e-mail, Web-based customer self-service, realtime
messaging and voice over the Internet. The company has more than 350 customers,
including 12 of the top 20 most visited sites on the Internet. Kana is based in
Redwood City, California, with offices worldwide. For more information about the
company, please visit Kana's Web site at http://www.kana.com or call Jason
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Cigarran at (650) 298-9282 ext. 8873.
In addition, the upcoming Kana User Conference (Feb. 15-16 in San Francisco),
the premier event for e-businesses committed to delivering superior online
customer communications, is accepting registrants at
http://www.kana.com/press/events/userconf.html.
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Kana Communications, Kana and the Kana logo are trademarks of Kana
Communications, Inc.
Cautionary Note Regarding Forward-looking Statements Under the Private
Securities Litigation Reform Act of 1995: Information in this release that
involves Kana's expectations, beliefs, hopes, plans, intentions or strategies
regarding the future are forward-looking statements that involve risks and
uncertainties. These statements include statements about Kana's strategies in
the marketplace, its market position and its relationship with customers. All
forward-looking statements included in this release are based upon information
available to Kana as of the date of the release, and we assume no obligation to
update any such
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forward-looking statement. These statements are not guarantees
of future performance and actual results could differ materially from our
current expectations. Factors that could cause or contribute to such differences
include, but are not limited to, the completion of the Silknet merger, and if
completed, the successful integration of Silknet, competition, increased
competition due to Kana's expanded product offering, risks associated with the
evolving and varying demand for customer communication software, our ability to
expand our operations, the successful integration BEI and NetDialog, acceptance
of email and the Internet as a communications medium, litigation over property
rights, and general economic factors. These and other factors are risks
associated with our business that may affect our operating results are discussed
in the Company's registration statement on Form S-1 declared effective by the
Securities and Exchange Commission ("SEC") on September 21, 1999 and our
quarterly reports on Form 10-Q filed with the SEC.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
Kana plans to file a Registration Statement on SEC Form S-4 in
connection with the Merger, and Kana and Silknet expect to mail a Joint Proxy
Statement/Prospectus to stockholders of Kana and Silknet containing information
about the Merger. Investors and security holders are urged to read the
Registration Statement and the Joint Proxy Statement/Prospectus carefully when
they are available. The Registration Statement and the Joint Proxy
Statement/Prospectus will contain important information about Kana, Silknet, the
Merger, the persons soliciting proxies relating to the Merger, their interests
in the Merger, and related matters. Investors and security holders will be able
to obtain free copies of these documents through the website maintained by the
U.S. Securities and Exchange Commission at http://www.sec.gov. Free copies of
the Joint Proxy Statement/Prospectus and these other documents may also be
obtained from Kana by directing a request through the Investors Relations
portion of Kana's website at http://www.kana.com or by mail to Kana
Communications, Inc., 740 Bay Road, Redwood City, CA 94063, attention: Investor
Relations, telephone: (650) 298-9282.
In addition to the Registration Statement and the Joint Proxy
Statement/Prospectus, Kana and Silknet file annual, quarterly and special
reports, proxy statements and other information with the Securities and Exchange
Commission ("SEC"). You may read and copy any reports, statements or other
information filed by Kana or Silknet either company at the SEC public reference
rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 or at any of the
Commission's other public reference rooms in New York, New York and Chicago,
Illinois. Please call the Commission at 1-800-SEC-0330 for further information
on the public reference rooms. Kana's and Silknet' filings with the Commission
are also available to the public from commercial document-retrieval services and
at the Web site maintained by the Commission at http://www.sec.gov.
Kana, its directors, executive officers and certain other members of
management and employees may be soliciting proxies form Kana stockholders in
favor of the issuance of Kana common stock in the merger. Information
concerning the participants in the solicitation is set forth in a Current Report
on Form 8-K filed on February 7, 2000.
<PAGE>
REPORTERS NOTE: A media teleconference is scheduled for Monday, February 7 at
7:30 a.m. PT/10:30 a.m. ET. Domestic dial-in: 1-800-260-0702 and International:
651-224-7472. The teleconference call name is "Kana Communications"
For more information contact:
Jason Cigarran
Kana Communications, Inc.
(650) 298-9282 ext. 8873
[email protected]
Sheri Dupart
Blanc and Otus for Kana
(650) 404-0900 ext. 341
[email protected]
Kyle Flaherty
Silknet Software, Inc.
(603)-665-1308
[email protected]
THE FOLLOWING IS A SLIDE SHOW PRESENTATION GIVEN BY KANA ON FEBRUARY 7, 2000
<PAGE>
Michael McCloskey
CEO
Kana Communications, Inc.
[Kana logo]
Ebusiness Solutions for
Online Customer Communications
Pie chart showing content. transaction, and customer communication.
Two Leaders Combine
Creating the Market Leader in a Rapidly Growing Industry
[same pie chart as prior slide (content, transactions and customer
communication), with Silknet logo superimposed]
Kana Helps You Increase Customer Loyalty, Drive Revenue, and Decrease Cost
[Diagram of Customer communication cycle the following bullets]
Marketing
* Engage customers
* Deliver relevant info
Drive transactions
Sales
* Increase close rates
* Cross-sell and up-sell
Leverage other e-Commerce initiatives
Service
* Decrease average cost per contact
* Deliver timely, consistent answers
Communicate over multiple channels
[At center of slide:]
* Customer profiles
* Knowledge base
Reporting and analysis
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Kana Helps You Increase Customer Loyalty, Drive Revenue, and Decrease Cost
Silknet Customer-facing Ebusiness platform
[Diagram of circle with following text]
Comprehensive
360* Customer View
Improves customer experience
Personal portals to enterprise
* Enterprise Integration
Call Tracking
Billing
ERP
SFA
CTI
eCommerce Integration
Online Content
Commerce
Transaction Server
Online Advertising
Web site
Transaction Overview
* Deal size $4.2 billion*
* Customers ~450
* Employees ~625
* Exchange ratio 0.83 Kana for 1 Silknet share
* Structure 100% Stock
* Kooper/Star ownership 66/34
* Expected close Q2 2000
* Headquarters Redwood City, CA
Company Kana Communications, Inc
* Based on Kana's closing stock price on 2/4/00
<PAGE>
Strategic Rationale
* Establish market leadership with ~ 450 customers
* Comprehensive, ebusiness platform
* Large, rapidly growing market
* Excellent cross-selling opportunities into installed base
* Consolidates the market and achieves critical mass
. 600 employees
. Over 200 in research and development
Approximately 200 in sales and marketing worldwide
<PAGE>
World class Ebusiness customers
[logos]
Ebay
GM
Williams Sonoma
NBCi
excite@home
Chase
Microsoft
Ford
cNet
Convergys
GAP
Nokia
Northwest
Travelocity
Peoplesoft
Shell
eToys
Lycos
Estee Lauder
Bell
Office Depot
Beyond.com
Cigna
3Com
NationsBank
Utility.com
SBC Communications
Provident Bank
Sprint
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Expanding distribution through partners
[logos]
Anderson consulting
Cambridge Technology Partners
Sapient
Deloitte & Touche
Microsoft
Scient
Viant
KPMG
Inventa
Cap Gemini
Davox
Viscious Systems
CSC
Graintar Systems
Customer benefits
* Comprehensive customer-facing ebusiness platform and applications
* 360 degree view of customer communications across e-mail, Web, and phone
* Improving the customer experience
Personalized portal to the enterprise
Synergies
* Establishing market leadership
* Market opportunity
* Complimentary product solution
* Customers
* Partnerships
Critical mass and outstanding team
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Kana Highlights
Large, Rapidly Growing Market
Strategic Ebusiness Platform
Compelling Customer Value Proposition
Highly Referenceable, Leverageable Customer Base
Experienced Management; Focused on High Growth
Kana logo
* Additional Information
* Kana plans to file a Registration Statement on SEC Form S-4 in connection
with the Merger, and Kana and Silknet expect to mail a Joint Proxy
Statement/Prospectus to stockholders of Kana and Silknet containing
information about the Merger. Investors and security holders are urged to
read the Registration Statement and the Joint Proxy Statement/Prospectus
carefully when they are available. The Registration Statement and the Joint
Proxy Statement/Prospectus will contain important information about Kana,
Silknet, the Merger, the persons soliciting proxies relating to the Merger,
their interests in the Merger, and related matters. Investors and security
holders will be able to obtain free copies of these documents through the
website maintained by the U.S. Securities and Exchange Commission at
http://www.sec.gov. Free copies of the Joint Proxy Statement/Prospectus and
------------------
these other documents may also be obtained from Kana by directing a request
through the Investors Relations portion of Kana's website at
http://www.kana.com or by mail to Kana Communications, Inc., 740 Bay Road,
-------------------
Redwood City, CA 94063, attention: Jason Cigarran, telephone: (650) 298-9282
ext. 8873.
* In addition to the Registration Statement and the Joint Proxy
Statement/Prospectus, Kana and Silknet file annual, quarterly and special
reports, proxy statements and other information with the Securities and
Exchange Commission ("SEC"). You may read and copy any reports, statements or
other information filed by Kana or Silknet either company at the SEC public
reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 or at any
of the Commission's other public reference rooms in New York, New York and
Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for further
information on the public reference rooms. Kana's and Silknet' filings with
the Commission are also available to the public from commercial document-
retrieval services and at the Web site maintained by the Commission at
http://www.sec.gov.
------------------
* Kana, its directors, executive officers and certain other members of
management and employees may be soliciting proxies form Kana stockholders in
favor of the issuance of Kana common stock in the merger. Information
concerning the participants in the solicitation is set forth in a Current
Report on Form 8-K filed on February 7, 2000.
