16th May 2008 – UK. The boards of Alterian and Mediasurface are today pleased to announce that they have reached agreement on the terms of a recommended offer by Alterian to acquire the entire issued and to be issued share capital of Mediasurface.
The Offer will be on the basis of 9 pence in cash and 0.0375 of a Consideration Share for each Mediasurface Share. The Offer values the entire issued and to be issued share capital of Mediasurface at approximately £18.1 million and each Mediasurface Share at 15 pence (based on the Closing Price of 160 pence per Alterian Share on 15 May 2008), representing a premium of 150.0 per cent to the Closing Price of 6 pence per Mediasurface Share on 23 April 2008 (being the last business day prior to the commencement of the Offer Period).
Alterian is a leading international provider of enterprise management software with its headquarters in Bristol, UK, but with a significant proportion of its operations in North America. The Company employs over 130 staff in the United Kingdom and North America. Since being admitted to the Official List in 2000, Alterian has grown both organically and through the completion of several acquisitions which have been successfully integrated into its business in order to extend the Company’s market reach and broaden its product offering.
Alterian's Integrated Marketing Platform helps marketers gain measurable improvement in the results of their activities. It provides marketers with practical and cost effective insight into their data and the tools to use this to execute an integrated marketing strategy across both online and offline channels. The Company has made a substantial investment in the Integrated Marketing Platform, both through organic development and acquisitions, to build on the core marketing analytics engine with marketing execution capabilities and applications to manage the marketing process. Alterian is highly rated by market researchers Gartner and Forrester as an enterprise marketing platform provider and by Jupiter as an email marketing platform provider.
Mediasurface provides Web Content Management software which enables the storage and delivery of content via web sites and other electronic channels. Whilst Web Content Management software can deliver personalised content, it is generally based on rules from other software and requires significant services investment. Investments in website content management are increasingly being driven by a desire to improve the customer experience.
The Alterian Directors believe that Mediasurface's technology is well regarded in the market, with a strong marketing user interface, and have identified Mediasurface as a strategic acquisition to enhance the Company's online marketing software offering as well as providing a number of additional benefits. Furthermore, the Alterian Directors believe that the benefits to Alterian of acquiring Mediasurface would be as follows:
• Further expansion into the rapidly growing market for online marketing software, providing increased scale, visibility and enhanced credibility with end users and industry analysts; • The broadening of Alterian's marketing software platform to incorporate websites as an additional supported marketing channel in addition to Alterian's existing channels of mail, telephone, email and RSS (web feed) formats. Alterian would be integrating pre-existing analytics, content management and execution across multiple communications channels; • The provision of a launch pad and customer base for the development of web analytics and web site optimisation software; • The use of Alterian's strong and growing distribution presence in North America to increase the penetration of Mediasurface's products in this area. For the year ended 30 September 2007, North American revenue represented just 7.6 per cent. of Mediasurface's total revenues compared to Alterian's figure of over 50 per cent. for the year ended 31 March 2008; • The benefit of Mediasurface's relationships with marketing agencies and system integrators to help accelerate Alterian's penetration into these sales channels and opportunities for cross selling of products; • The expansion of Alterian's geographic presence, taking advantage of Mediasurface's European and Asia Pacific presence; • An improved ability to manage growth in research and development costs by utilising Mediasurface's India-based research and development centre; and • The realisation of other cost savings.
The combination of the two businesses would create an Enlarged Group with, on the basis of the last audited accounts of Alterian and Mediasurface, annualised revenues of over £30.0 million and which generates approximately 50 per cent. of its revenue from the sale of online marketing software.
Commenting on the Offer, Keith Hamill, Chairman of Alterian, said:
"The acquisition of Mediasurface will add complementary technology and products, which when integrated would further broaden the Alterian product base and significantly increase the proportion of revenues arising from the online sector. The sale of Mediasurface products would also benefit from Alterian's strong distribution in North America. This is an important strategic development for Alterian which the Board considers will accelerate its success."
Commenting on the Offer, Michael Jackson, Chairman of Mediasurface, said:
“This transaction represents a natural fit, both in terms of products and geography, and I look forward to the combined company enjoying considerable future success.”
The transaction is subject to customary closing conditions and is expected to close late June 2008 and the Directors expect that regardless of the outcome of these discussions, the services that Mediasurface provides to existing and future customers will be unaffected.
