|
Adobe says it will have costs of between USD12 million and USD15 million from the purchase but claims the acquisition will fuel sales by as much as USD35 million. The acquisition follows an earlier, unsolicited USD43.5 million bid for the company from Open Text Corp. Abe Ostrovsky Accelio's chairman said the offer from Adobe provides "significantly more value" for shareholders than the hostile offer from Open Text.
Nevertheless, some Accelio shareholders have already tendered their common shares under the Open Text offer and Accelio management urged those investors to "withdraw their tendered shares immediately." AGF Management, owner of 11.8 percent of Accelio's shares, said this week that it intended to tender its shares to Open Text.
As part of the agreement, Accelio has agreed to pay to Adobe a "break-up" fee of approximately USD2.9 million if the Accelio board of directors approves or recommends another acquisition.
Investors seemed ecstatic about the news as Accelio shares rocketed up over 45 percent in New York to USD2.79 at noon on Friday. Adobe shares were also up on the Nasdaq to USD36.4, a rise of over eight percent.
The deal transfers into approximately CAN4.50 per Accelio share on a fully diluted basis at current exchange rates of around USD1 to CAN1.59. While the deal has been approved and recommended by the Accelio board, it remains subject to two thirds shareholder approval as well as regulatory authorities in the US and Canada.
Accelio makes software that helps customers manage business processes driven by electronic forms and it is thought that the company's business will complement Adobe's popular acrobat (or .pdf) software, its fastest growing segment. With 400 million copies of Adobe Acrobat reader distributed, the software has become a common way to read Internet-based documents. Adobe claims that the market for electronic forms will exceed USD3 billion by 2003.
"There are significant synergies in both the technologies we are developing and the markets we serve. Through the combined strengths of the two companies, we expect that Adobe will have the opportunity to quickly create a more complete enterprise-class solution than either company could have created on its own," said Kevin Francis, president and chief executive officer of Accelio in a statement.
Ottawa-based Accelio, formerly known as Jetform, runs its EMEA headquarters through its Blackrock Co. Dublin facilities. Accelio was in fact a struggling business as its November results indicated. In its second fiscal quarter the company reported revenues of CAN20.9 million, compared to CAN26.7 a year earlier. More importantly operating loss for the quarter was CAN13.8 million, compared to an operating income of CAN0.5 million for the same period in 2000.
These losses were attributed to the slowdown in business following 11 September as well as the general economic malaise. However on a positive note for its Dublin operation, the company said on a year over year basis, overall European revenue increased three percent with European maintenance and support revenue up 25 percent and professional services revenue 56 percent higher.
At that time the company implemented a global salary reduction program of 10 percent for all employees earning CAN60,000 or higher. Employees earning less than CAN60,000 received a five percent reduction. The company also cut a number of jobs and reorganised its management in Canada and Asia.
Adobe Systems employs around 3,000 worldwide and for fiscal year ended 30 November it announced that revenues fell three percent USD1.23 billion. In that year, net income fell 29 percent to USD205.6 million.
|
