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Filed by PSINet Inc.
Pursuant to Rule 425 under the Securities Act of
1933 and deemed filed pursuant to Rule 14a-12(b) and
Rule 14d-2(b) of the Securities
Exchange Act of 1934
Commission File No.: 0-25812
Subject Company: Metamor Worldwide, Inc.
Commission File No.: 0-26970
On March 22, 2000, at 11:00 a.m. U.S. EST, PSINet Inc. hosted a press briefing
by telephone, the text of which is included below:
PSINet - Metamor Analyst Conference Call
Bill Schrader, Pete Wills, Peter Demeris, Dave Campbell
Wednesday, March 22, 2000
Remarks as prepared for delivery
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Good morning and thank you all for joining us today for an announcement critical
to the future of PSINet - one that will help us solidify our position as the
world's premiere Internet Super Carrier.
Before I begin, my lawyers require me to read the following:
Statements in this press release regarding forward looking statements that state
PSINet's management's intentions, hopes, beliefs, expectations, or predictions
of the future, or that discuss any other contingent future events, are forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1996. In particular, such statements include those regarding the
potential benefits of their business models, current and proposed service
offerings, and key performance metrics.
PSINet's actual results could differ materially from those projected in such
forward-looking statements because of changes in business strategies,
integration programs, rapid changes in the market, and changes in the scope of
PSINet's client engagements.
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For additional information and risk factors including factors that could cause
actual results to differ materially from those in forward-looking statements, we
ask you refer to the recent documents filed by PSINet with the Securities and
Exchange Commission.
When I first announced our Internet Super Carrier strategy last Fall in New York
City, I outlined an aggressive plan to turn PSINet into the partner of choice
for businesses around the world to leverage the Internet for maximum advantage.
To recap, the four aspects of the Internet Super Carrier are:
. A collection of global e-commerce hosting centers collocated with our points
of presence in the world's top business markets;
. Wholly-owned IP infrastructure that provides reliable service at the best
cost basis;
. A global brand name supported by local language sales and service and
provisioning; and
, An extensive global distribution system supported by sales personnel, value-
added resellers, systems integrators and Web design professionals.
Today, I'm pleased to announce an acquisition that will significantly strengthen
the final two legs of our ISC strategy, and enable PSINet to offer a complete
portfolio of IP communications, hosting, out-sourced applications, and system
integration services.
Last night, PSINet executed an agreement to acquire Metamor Worldwide, one of
the fastest growing and leading providers of IT services in the world.
Metamor, headquartered in Houston, Texas, has more than 70 offices with over
4,500 employees worldwide. Once integrated, this move will provide PSINet with a
global staff of information technology consultants, as well as an unmatched
suite of industry-leading solutions for Internet access, Web hosting, systems
integration, eCommerce and applications outsourcing.
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In addition, the acquisition also gives PSINet an interest in Xpedior, an
independent, publicly traded company. Xpedior provides innovative and
comprehensive e-business solutions to Global 2000 companies and emerging
Internet businesses. In particular, Xpedior concentrates its efforts on the
heavy lifting involved in linking legacy back office systems to Web front ends
to enable its customers to conduct business-to-business and business-to-consumer
applications over the Internet.
In the end, our acquisition of Metamor and Xpedior will go a long way toward
strengthening our status as an Internet Super Carrier - the type of company that
I believe will be the partner of choice for e-business in the 21st century.
It will be PSINet, and only PSINet that will be able to offer a bundled array of
access, hosting, business-to-business eCommerce, communications, IT consulting,
outsourcing, and system integration services.
Joining me on this conference call today are several of the principals involved
in the transaction. Next, we will hear from Harold S. (Pete) Wills, President
and Chief Operating Officer of PSINet. Pete will provide an overview of the
terms of the transaction, as well as go into further detail about the incredible
new operating strengths of the new PSINet.
After that, we'll hear from Peter Demeris, Chairman and CEO of Metamor
Worldwide. Peter will give us more details on Metamor's products and services -
the ones that will be able to take incredible advantage of PSINet global network
and hosting centers -- as well as its business units and customer base.
Finally, we'll hear from David Campbell, President and CEO of Xpedior, who will
outline their operations and just how their products and services will help fill
out the PSINet solution set.
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At that time I'll return to wrap things up, and we'll be ready to begin the Q&A.
With that, I'd like to introduce PSINet President and Chief Operating Officer,
Pete Wills.
Pete.
Thanks Bill.
First, I'd like to briefly outline the terms of the deal. After that, I'll
review some of the incredible new opportunities the acquisition of Metamor will
present for PSINet, and wrap things up by outlining some of the revenue and
expense synergies we can expect to enjoy as a result of the merger.
On March 21st, PSINet agreed to acquire Metamor Worldwide for the equivalent of
$1.9 billion in an all-stock transaction.
This roughly translates into each outstanding share of Metamor Worldwide being
converted into 0.90 shares of PSINet - an implied price of $45 per share based
on our price at the close of the market yesterday, and approximately a 190%
premium on yesterday's market close for Metamor Worldwide.
The transaction will be structured under the purchase method of accounting, and
will be tax-free to shareholders. Under certain circumstances, if the merger is
not completed, a $45 million breakup fee will apply. The deal, of course, is
subject to approval by the shareholders of both companies.
In addition, PSINet has agreed to invest $50 million in 8.50% convertible
preferred securities in Metamor's e-business subsidiary, Xpedior, convertible
into 1.33 million shares at a conversion price of $37.50 per share.
Pending approval by our respective shareholders, there is little doubt that this
new combination is a true "category killer" - a company that is poised to
dominate its market
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space and become the dominant provider of IP communications and outsourced and
managed solutions to middle market companies.
There are several key strategic and financial reasons for this deal.
First, the new company will provide incredible new cross-selling opportunities
for the combined product line. PSINet has about 90,000 enterprise customers -
and only about 5,000 are completely "Web-centric." The vast majority of the
remainder present an incredible new opportunity for Metamor's combined product
set.
Second, the new company will set the stage for rapid global expansion. PSINet
already has a global network in place and can provide Metamor's sales force with
local market knowledge, space, bandwidth and customers leads in 27 telecom
markets around the world.
Meanwhile, Metamor has over 80 offices worldwide with multiple knowledge centers
staffed with highly experienced systems integration and software engineers,
including an operation in India that can help PSINet's attack the emerging e-
business market in that country.
Third, we expect the merger to also accelerate the development and deployment of
new e-business and IP services across the combined product line to meet total
customer requirements.
Fourth, by working together, the new company will speed its entry into high
margin ASP and managed service offerings.
Fifth, as Web hosting becomes the platform of choice for eCommerce solutions, we
expect PSINet will be able to capitalize on the migration of legacy ERP systems
to hosted solutions.
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In addition, we expect to realize significant synergies on both the revenue and
expense side. We should experience significant savings on internal PSINet IT
projects, as well as significant incremental savings on Metamor's data
communications costs, and on consolidation of the combined public company and
back office operations.
There are also considerable advantages in terms of revenue flow. With the
consolidation, PSINet will be able to reduce the variability of cash flow by
adding products and services to the mix that produce recurring revenue on a per
project basis. In addition, the character of the services offered by Metamor are
inherently "stickier" than the PSINet product set - a factor that will help
drive up customer retention rates as well as increase the amount of revenue
generated per customer.
Next, I'd like to introduce Peter Demeris, Chairman and CEO of Metamor
Worldwide. Peter will go into greater detail concerning Metamor's operations,
and how they are attacking the $349 billion global market for IT services.
Peter.
Thanks Pete. I'm pleased to be able to join you today for this announcement.
Clearly, the combination of PSINet and Metamor Worldwide will be able to
accomplish more working together than we ever could have separately.
First, let me review our operations. As Bill said earlier, Metamor Worldwide is
a leading provider of IT solutions to large and mid-sized organizations around
the world. We currently employ over 4,000 people in 80 offices in the US, India,
Europe and Asia.
1999 revenue and EBITDA were $547 million and $62 million respectively. We
provide a broad range of IT solutions for our customers, including:
. E-business;
. Customized software and applications development;
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. 24x7 hosting and IT support systems;
. Network integration; and
. Training and technical documentation.
Vertical markets that we serve include:
. Financial services;
. Health care and Pharmaceuticals;
. Industrial and manufacturing;
. Retail and distribution;
. Telecom; and
. Government at all levels.
Meatamor Worldwide consists of five business units:
. Global Solutions;
. Enterprise Solutions;
. Industry Solutions;
. European Solutions; and
. Xpedior - our comprehensive e-business solutions subsidiary.
I'll outline the products and services that each unit provides with the
exception of Xpedior - which Dave Campbell will handle after I finish.
Our Global Solutions unit provides mission-critical systems maintenance and
enhancement, as well as application development and Internet, Extranet and Web-
enablement. Our customers for this unit include such Fortune 500 multinationals
as Bank of America, GTE and Nabisco.
The Enterprise Solutions unit provides a range of enterprise value chain
services, including a comprehensive array of ERP services like: implementation,
training and
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change management; application outsourcing services; as well as offshore
operations and maintenance. It also offers ERP "bolt-ons" that enable business-
to-business supply chain management as well as business-to-consumer customer
relationship management. In addition, Enterprise Solutions also offers a full
suite of enterprise application integration services like data warehousing, data
mining, business intelligence and business analysis. Customers of this unit
include HP, Goodyear, SAP, Nestle, Westinghouse, and Panasonic.
Our Industry Solutions unit is focused on providing IT solutions to targeted
vertical markets. In particular, it concentrates on federal, state and local
governments, as well as finance, manufacturing and transportation. Customers of
this unit include the states of Virginia and Florida, as well as Lockheed
Martin, GE, IBM, Sprint, 3M and Bell South.
Our European Solutions unit provides a complete suite of IT consulting services
for a wide range of businesses across the continent. Products and services
include: application development; network engineering and supervision;
development of messaging systems and groupware networks; server management
assistance (including audit, migration, supervision and security); outsourcing;
knowledge management; and ERP implementation and change management. Like our
other units, our European operations boast a wide range of multinational and
Fortune 500 companies.
Standing alone, Metamor Worldwide is a formidable player in the IT services
market, and represents one of the largest reservoirs of IT talent in the
industry. However, once this talent and knowledge base is married to the global
network and operations of PSINet, we will have the making of a global
powerhouse. A powerhouse that is able to leverage a global network of hosting
centers and worldwide infrastructure to deliver the broadest array of services
to all of the top business markets in the world, and meet the total requirements
of the business customer that seeks to utilize the Web and all its efficiencies.
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Next, I'd like to introduce Dave Campbell, President and CEO of our e-business
subsidiary, Xpedior, to describe in detail the operations, products and services
of that business.
Dave.
Thanks Peter.
Xpedior provides innovative and comprehensive e-Business solutions to Global
2000 companies and emerging Internet businesses. We use our Xpedior process and
our reusable solutions, or Xpediators, to deliver a broad range of services
designed to help our clients succeed in the emerging networked economy.
We combine extensive technical expertise with strategy consulting and creative
design to enable our clients to capitalize on the communications power and
transaction efficiencies of the Internet. Since 1994, Xpedior has demonstrated
its ability to develop e-Business solutions that allow our clients to generate
new revenue and operate more efficiently.
1999 revenues and EBITDA were $143 million and $12 million respectively.
Xpedior currently serves over 300 clients, including Citibank, HP, MCI and
Sears. Our extensive experience providing e-Business solutions has enabled us to
develop and evolve our Xpedior process and suite of Xpediators. This process is
a five step methodology for delivering solutions to our clients.
Our Xpediators are a collection of proven, reusable solutions, including
software architectures, components and applications that we leverage in
delivering a broad range of services.
Our professionals work out of five solutions centers based throughout the U.S.
where they are able to share expertise and best practices to develop and deliver
Internet
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technology solutions. By combining our Xpedior process and Xpediators with our
solution centers, we are able to reduce our clients' time to market and maximize
the quality of our products and services.
Our e-Business solutions integrate one or more of the following services,
customized to fit our client's particular needs:
. Digital business strategy;
. eCommerce;
. Digtial branding;
. e-Business intelligence;
. e-Business applications and integration;
. e-Business technology management;
. e-Business networks; and
. Enterprise portals and knowledge management.
Xpedior currently employs over 1,400 individuals in 14 U.S. markets, as well as
the U.K., Australia and Canada. Over the past six years we have developed
extensive expertise in the financial services, healthcare, media, and
publishing, retail and distribution and telecommunications industries. Xpedior
can leverage this expertise in delivering our solutions and marketing our
services to potential new clients.
For Xpedior, this merger means an explosion in new opportunities. By working
together with the PSINet sales force, we will not only be able to offer front
end solutions to over 90,000 PSINet corporate accounts around the world, we will
also be able to offer more complex back office integration services. In this
case, services that truly create new efficiencies and generate profits and
improved customer service for our client base.
Clearly, this merger is a natural fit and offers opportunities that Xpedior
could never have generated on its own, and I'm proud of the value our employees
have built into our company to make it such an attractive partner for PSINet.
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Thanks Bill, and we're happy to be on board.
Thanks David. Now, I would like to spend the remainder of our call this morning
taking questions from our listeners. Is the operator there?
* * * *
A proxy statement/prospectus will be filed by PSINet Inc. ("PSINet") and Metamor
Worldwide, Inc. ("MWI") with the Commission as soon as practicable. YOU ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO
BE FILED WITH THE COMMISSION. THE PROXY STATEMENT/PROSPECTUS WILL CONTAIN
IMPORTANT INFORMATION THAT YOU SHOULD CONSIDER BEFORE MAKING ANY DECISION
REGARDING THE MERGER AND RELATED TRANSACTIONS. You may obtain a free copy of
the proxy statement/prospectus (when available) and other documents filed by
PSINet and MWI with the Commission at the Commission's web site at www.sec.gov.
The proxy statement/prospectus and other documents filed with the Commission by
PSINet may also be obtained free of charge from PSINet by directing a request to
PSINet Inc., 510 Huntmar Park Drive, Herndon, Virginia 20170, Attn: Corporate
Secretary. In addition, the proxy statement/prospectus and other documents
filed with the Commission by MWI may be obtained free of charge from MWI by
directing a request to Metamor Worldwide, Inc., 4400 Post Oak Parkway, Suite
1100, Houston, Texas, 77027.
PSINet and its officers and directors may be deemed to be participants in the
solicitation of proxies from its stockholders with respect to the transactions
contemplated by the merger agreement and may have an interest either directly or
indirectly by virtue of their security holdings or otherwise. Information
regarding such officers and directors is included in PSINet's Definitive Proxy
Statement for its 1999 Special Meeting of Shareholders filed with the Commission
on August 31, 1999. This document is available free of charge at the
Commission's web site at http://www.sec.gov and from PSINet at the address set
forth above. MWI and its officers and directors may be deemed to be participants
in the solicitation of proxies from stockholders of MWI with respect to the
transactions contemplated by the merger agreement and may have an interest
either directly or indirectly by virtue of their security holdings or otherwise.
Information regarding such officers and directors is included in MWI's Proxy
Statement for its 1999 Annual Meeting of Stockholders filed with the Commission
on April 16, 1999. This document is available free of charge at the
Commission's web site at http://www.sec.gov and from the MWI at the address set
forth above.
The preceding communications contain forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. In particular, statements regarding the PSINet/MWI merger
are based on management's current expectations or beliefs and are subject to a
number of factors and uncertainties
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that could cause actual results to differ materially from those described in the
forward-looking statements. The following factors, among others, could cause
actual results to differ materially from those described in the forward-looking
statements: inability to obtain or meet conditions imposed for governmental
approvals for the merger; failure of the PSINet or MWI stockholders to approve
the merger; the risk that the PSINet and MWI businesses will not be integrated
successfully; and costs related to the merger. You should also give careful
consideration to cautionary statements made in PSINet's reports filed with the
SEC, especially the section entitled "Forward-Looking Statements" in the
"Business-Risk Factors" section of PSINet's Form 10-K for the fiscal year ended
December 31, 1999.
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