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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 7, 2000
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SILKNET SOFTWARE, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 000-25491 02-0478949
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
50 Phillippe Cote Street
Manchester, NH 03101
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (603) 625-0070
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ITEM 5. OTHER EVENTS.
On February 7, 2000, Silknet Software, Inc. entered into an Agreement and
Plan of Merger with Pistol Acquisition Corp., a Delaware corporation and
wholly-owned subsidiary of Kana Communications, Inc., and Kana Communications,
Inc., a Delaware corporation. The information contained in the joint press
release of Silknet and Kana, dated February 7, 2000, attached as Exhibit 99.1 is
incorporated herein by reference.
Pursuant to the merger agreement, and subject to the conditions set forth
therein (including approval by stockholders of Silknet and Kana), Pistol
Acquisition will be merged with and into Silknet. At the effective time of the
merger, the separate existence of Pistol Acquisition will cease to exist and
Silknet will continue as the surviving corporation and as a wholly-owned
subsidiary of Kana. Holders of outstanding shares of common stock, par value
$.01 per share, of Silknet will receive, in exchange for each share of Silknet
common stock held, 0.830 shares of common stock, par value $.001 per share, of
Kana. In addition, Kana will assume all outstanding options and warrants to
purchase Silknet common stock and will assume all purchase rights outstanding
under Silknet's employee stock purchase plan.
The merger agreement contains customary representations and warranties on
the part of both parties and the consummation of the merger is subject to
customary closing conditions.
As an inducement to the other party to enter into the merger agreement,
each party granted the other the right to purchase up to 19.9% of such party
under certain circumstances. If the merger is consummated, the Silknet common
stock will be deregistered under the Securities Exchange Act of 1934, as amended
and delisted from the Nasdaq National Market.
In connection with the merger, certain stockholders holding approximately
43% of Silknet's voting power entered into voting agreements pursuant to which
such stockholders of Silknet have agreed to vote their shares in favor of, among
other things, the adoption of the merger agreement and the approval of the
merger. In addition, certain stockholders of Silknet entered into lock-up
agreements pursuant to which such stockholders have agreed not to sell or
transfer shares of (i) Silknet common stock prior to the consummation of the
merger or (ii) Kana common stock received upon the closing of the merger for a
period of ninety days after the closing.
Statements contained in this Report on Form 8-K that are not historical
fact may constitute forward-looking statements and are made under the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. The
actual results of operations and financial condition of the combined company may
in the future vary significantly from those stated in any forward-looking
statements. Factors that may cause such differences include, but are not limited
to, the completion of the merger, and if completed, the successful integration
of the combined companies, increased competition due to the expanded product
offerings of the combined companies and other risks identified in Silknet's
Securities and Exchange Commission filings.
ITEM 7. EXHIBITS.
(a) Exhibits.
Exhibit No. Description
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99.1 Press Release of Silknet Software, Inc. and Kana
Communications, Inc. dated February 7, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this current report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
SILKNET SOFTWARE, INC.
By: /s/ Patrick J. Scannell, Jr.
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Patrick J. Scannell, Jr.
Vice President, Chief Financial
Officer, Treasurer and Secretary
Dated: February 7, 2000
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release of Silknet Software, Inc. and Kana
Communications, Inc. dated February 7, 2000.
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Exhibit 99.1
KANA AND SILKNET SIGN LANDMARK MULTI-BILLION DOLLAR MERGER
Two of the fastest growing public software companies unite in industry's largest
e-business software deal
REDWOOD CITY, CA -- 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 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.
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"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.
Market Opportunity
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.
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.
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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 eBusinessTM 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.
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.
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
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 www.silknet.com or by calling Silknet at
(603) 625-0070.
About Kana Communications, Inc.
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,
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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 WWW.KANA.COM or call Jason 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.
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 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.
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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.
For more information please 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]
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