Filed by Art Technology Group, Inc. pursuant to
Rule 425 under the Securities Act of 1933, as amended and
deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934, as amended
Subject Company: Primus Knowledge Solutions, Inc.
Commission File No. 000-26273
On August 10, 2004, Art Technology Group, Inc. and Primus Knowledge Solutions,
Inc. issued the following joint press release:
ATG to Acquire Primus Knowledge Solutions, Inc.;
Combination Will Create One of the Largest Online Commerce and
Service Software Companies
CAMBRIDGE, Mass. & SEATTLE--(BUSINESS WIRE)--Aug. 10, 2004--ATG
(Art Technology Group, Inc., NASDAQ: ARTG) the software provider
behind the Web's richest customer experiences and Primus Knowledge
Solutions, Inc. (NASDAQ: PKSI), an award-winning customer service
software provider, today announced a definitive agreement for ATG to
acquire Primus. Under the terms of the all stock deal, the transaction
is valued at approximately $30 million to $33 million, based upon
ATG's closing stock price as of August 9, 2004. For the 12 month
period ended June 30, 2004, the two companies had combined revenue of
more than $90 million. Cost synergies between the two companies are
expected to result in between $10 million and $15 million in annual
savings beginning in 2005. The transaction is expected to close during
the fourth quarter of 2004 and be accretive to ATG's forecasted
results for the full year 2005.
ATG's industry-leading software for online commerce and marketing
combined with Primus' award-winning customer service software
solutions will create one of the industry's largest online commerce
and service software companies. The combination will produce the most
complete consumer-facing platform to work seamlessly through Web,
email, call center, and other channels.
"Companies want to market to, sell to and service their customers
through a variety of channels and provide the most seamless,
integrated experience for these customers," said Bob Burke, president
and CEO of ATG. "Combining Primus' products and technical expertise
with ATG creates an e-business powerhouse, with the breadth of
technology and the critical mass that greatly enhances our ability to
provide complete customer experience solutions across all channels."
ATG delivers a rich customer experience through integrated
customer-facing marketing, selling and service applications. ATG
software solutions include:
-- The commerce application used by more high-end Web sites than
any other
-- The # 1 Scenario Personalization solution according to the
Information Management Association. ATG Scenario
Personalization(SM) is used by top performing Web sites
including American Airlines, AT&T Wireless, Fidelity
Investments, InterContinental Hotels Group (ranked the Best
International Hotel Site), Neiman Marcus, and Wells Fargo to
manage customer-facing business processes
-- Marketing solutions that uniquely integrate email and Web
interactions, ranked among the top four in the industry by
Gartner
-- Customer service technology that provides information that is
more intelligent, personal and relevant
Primus is a recognized leader in self- and assisted-service
technologies. Its software solutions include:
-- The highest ranking solution in Web Self-Service suites from
Gartner
-- Advanced email response management technology ranked # 1 by
Gartner
-- Extensive knowledgebase and natural language processing search
technology supporting call centers, help-desk staff, field
service workers, wireless users and self-service sites
-- Call center problem resolution technology integrated with
major CRM suites such as Siebel, PeopleSoft and Remedy
"The combination of ATG's commerce and marketing solutions with
Primus' award-winning customer service and support technologies is a
powerful and natural fit," said Michael Brochu, chairman, president
and CEO of Primus. "This joint offering will provide enterprises with
the industry's most integrated customer experience solution to power
their e-business initiatives and is a win-win for our customers,
shareholders, employees, and partners."
The acquisition creates a number of synergies on both the top and
bottom line. The opportunity to sell integrated commerce and service
solutions into each company's respective customer base provides ATG
with significant revenue growth potential. On the expense side, the
combination is expected to generate between $10 million and $15
million in annual savings beginning in 2005, through workforce
synergies, facilities consolidation and the merger of accounting,
legal and regulatory functions.
"Consolidation in the eService market is necessary as enterprises
are looking for integrated multi-channel solutions that leverage all
aspects of the customer service and support continuum," said Esteban
Kolsky, senior research analyst, Gartner, Inc. "The combination of
e-commerce and e-marketing with self- and assisted-service software
solutions creates a necessary offering that enterprises today require
to enhance the overall customer experience."
TERMS OF THE AGREEMENT
Under the terms of the agreement, ATG is acquiring all of the
outstanding shares of Primus. Upon completion of the transaction
Primus shareholders are expected to own approximately 30 percent to 32
percent of the combined company's outstanding stock on a fully diluted
basis. The transaction is expected to be tax-free to Primus
shareholders. Based upon ATG's latest closing stock price, and
assuming expected exchange ratios in the range of 1.2976 to 1.4169 ATG
shares for each diluted share of Primus, the transaction is valued at
approximately $30 million to $33 million. The exchange ratio is
subject to adjustment within this range based upon Primus' achievement
of specified minimum cash and working capital requirements at closing,
but in no event will the exchange ratio be less than 1.2976 ATG shares
for each diluted share of Primus.
All directors and executive officers of Primus and certain other
shareholders, owning in aggregate approximately 14.6% of Primus'
outstanding shares, have signed an agreement to vote their shares in
favor of the transaction. Both Primus' and ATG's boards of directors
have unanimously approved the transaction. The transaction requires
the approval of shareholders of both companies. Pending legal and
regulatory review and shareholder approval, the transaction is
expected to close during the fourth quarter of 2004.
As part of the transaction, ATG anticipates that it will be adding
two members to its board of directors, bringing the total to nine
board members. It is anticipated that Michael Brochu and Daniel Regis,
chairman of Primus' audit committee, will become members of the board
of directors of ATG.
SG Cowen is acting as exclusive financial advisor to ATG, and
Broadview is acting as financial advisor to Primus in connection with
this transaction.
FINANCIAL SUMMARY
The combined company is anticipated to generate more than $100
million in revenue for 2005 and is expected to be both profitable and
cash flow positive in 2005.
----------------------------------------------------------------------
(Unaudited, Dollars in 000's) Twelve Months Ended
June 30, 2004
Combined
ATG Primus Company
-------- -------- --------
Total revenues $62,903 $27,675 $90,578
License revenue $19,696 $11,059 $30,755
Percent of total revenues 31% 40% 34%
Services revenue $43,207 $16,616 $59,823
Percent of total revenues 69% 60% 66%
Cash, cash equivalents and marketable
securities $32,755 $8,335 $41,090
Employees 324 155 479
------------------------------------------ -------- -------- --------
CONFERENCE CALL NOTICE
In conjunction with this news release, ATG and Primus management
will host a conference call for investors at 9:00 a.m. ET on
Wednesday, August 11, 2004. The call will be broadcast live over the
Internet. Investors interested in listening to the Webcast should log
onto the "Investors" section of the ATG Web site, located at
www.atg.com, at least 15 minutes prior to the event's broadcast. To
access the live conference call, please dial (800) 500-0920 or (719)
457-2699. A replay of the conference call can be accessed for a period
of one week by dialing (888) 203-1112 or (719) 457-0820 (confirmation
code: 914952) or via Webcast on ATG's Web site.
ABOUT PRIMUS KNOWLEDGE SOLUTIONS, INC.
Primus Knowledge Solutions (NASDAQ: PKSI) develops award-winning
software that enables companies to provide a superior customer
experience via contact centers, help desks, Web self-service, and
electronic communication channels. Primus technology powers every
interaction with knowledge to increase customer satisfaction and
reduce operational costs. The company continues to receive industry
accolades for its robust product platform, including a 2004 CRM
Excellence Award and 2004 Users Choice Award for Primus(R)
KnowledgeCenter, and "Strong Positive" ratings from Gartner, the
leading provider of research and analysis on global IT, in both the
Web Self-Service Gartner MarketScope for 1H04 and the ERMS Gartner
MarketScope for 1H04. In 2003, Primus received the STAR Award for
"Best Support Technology Vendor" from the Service & Support
Professionals Association (SSPA), was recognized for its trend-setting
products and named one of the "100 Companies that Matter in Knowledge
Management" by KMWorld magazine, and received the CRM Excellence Award
from the editors of Customer Interaction Solutions magazine. Global
organizations such as Allied Irish Bank, The Boeing Company, CompuCom,
EMC, Ericsson, Inc., Fujitsu Limited, Inc., IBM, HSBC, Orange,
Motorola, 3Com, and T-Mobile rely on Primus technology to enhance
their customer service and support initiatives. Visit www.primus.com
for more information.
ABOUT ATG
ATG (Art Technology Group, Inc., NASDAQ: ARTG) delivers innovative
software to help high-end consumer-facing companies create a richer,
more adaptive interactive experience for their customers and partners
online and via other channels. ATG has delivered category-leading
e-business solutions to many of the world's best-known brands
including Best Buy, Kingfisher, Neiman Marcus, Target, Fidelity
Investments, Friends Provident, Merrill Lynch, Wells Fargo, A&E
Networks, Warner Music, AT&T Wireless, France Telecom, Philips,
Procter & Gamble, Hewlett-Packard, American Airlines, InterContinental
Hotels Group, US Army, and US Federal Aviation Administration. The
company is headquartered in Cambridge, Massachusetts, with additional
locations throughout North America, Europe, and Asia. For more
information about ATG, please visit www.atg.com.
(C) 2004 Art Technology Group, Inc. ATG and Art Technology Group
are registered trademarks of Art Technology Group, Inc., and Scenario
Personalization is its service mark. All other product names, service
marks, and trademarks mentioned herein are trademarks of their
respective owners.
ADDITIONAL INFORMATION ABOUT THE ACQUISITION AND WHERE TO FIND IT
ATG intends to file a registration statement on Form S-4 in
connection with the transaction, and ATG and Primus intend to mail a
joint proxy statement/prospectus to their respective stockholders in
connection with the transaction. Investors and security holders of ATG
and Primus are urged to read the joint proxy statement/prospectus when
it becomes available because it will contain important information
about ATG, Primus and the transaction. Investors and security holders
may obtain a free copy of the joint proxy statement/prospectus (when
it is available) at the SEC's Web site at www.sec.gov. A free copy of
the joint proxy statement/prospectus may also be obtained (when it is
available) from ATG or Primus. ATG and Primus file annual, quarterly
and special reports, proxy and information statements, and other
information with the SEC. Investors may read and copy any of these
reports, statements and other information at the SEC's public
reference rooms located at 450 5th Street, N.W., Washington, D.C.,
20549, or any of the SEC's other public reference rooms. Investors
should call the SEC at 1-800-SEC-0330 for further information on these
public reference rooms. The reports, statements and other information
filed by ATG and Primus with the SEC are also available for free at
the SEC's Web site at www.sec.gov. A free copy of these reports,
statements and other information may also be obtained from ATG or
Primus.
The executive officers and directors of ATG and Primus may be
deemed to be participants in the solicitation of proxies from the
stockholders of Primus and ATG in favor of the acquisition. A
description of the interests of ATG's executive officers and directors
in ATG is set forth in the proxy statement for ATG's 2004 Annual
Meeting of Stockholders, which was filed with the SEC. A description
of the interests of Primus' executive officers and directors in Primus
is set forth in the proxy statement for Primus' 2004 Annual Meeting of
Stockholders, which was filed with the SEC. Investors and security
holders may obtain more detailed information regarding the direct and
indirect interests of ATG's and Primus' executive officers and
directors in the acquisition by reading the preliminary joint proxy
statement/prospectus filed with the SEC when it becomes available.
This press release contains forward-looking statements for
purposes of the safe harbor provisions under The Private Securities
Litigation Reform Act of 1995. These statements involve known and
unknown risks and uncertainties that may cause ATG's and Primus'
actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity,
performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as, "may", "should",
"expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential", "continue", or the negative of these terms or
other comparable terminology. Important risk factors affecting ATG's
and Primus' business generally may be found in their periodic reports
and registration statements filed with the Securities and Exchange
Commission at www.sec.gov. Risk factors related to the subject matter
of this press release include the possibilities that ATG may not be
successful in integrating Primus' business with its own; that the
anticipated cost savings from synergies will be less than expected;
that depreciation, amortization and potential impairment charges
associated with the acquisition could adversely affect the combined
company's results of operations; that shareholder approval and
governmental clearances needed to consummate the transaction may be
delayed or withheld; that ATG's and Primus' partners, customers or
investors may react unfavorably to the combination; that if the
acquisition is not completed, ATG's and Primus' businesses may be
harmed; the risks and costs of potential and existing intellectual
property litigation; the possibility that either company's product
deployments will not be successful, on time or significantly enhance
the user's Internet experience or handle user volumes; that those
customers leveraging the combined companies' products won't have the
opportunity to increase revenue and decrease future costs; the need to
adapt to rapid changes so products do not become obsolete; the
possibility of errors in both companies' software products; the
possibility that the company will not be successful in combining the
companies' solutions or the companies' combined solutions will not
make customer implementations faster or more flexible or permit the
customer to meet its customer-facing or infrastructure requirements;
that the companies' products will not continue to be integrated with
third party applications or application servers or will not support
all Web services enabled systems; that ATG's product strategy may
change in the future; and the risks and costs of intellectual property
litigation. Neither ATG nor Primus undertakes any obligation to update
any of the forward-looking statements after the date of this press
release.
CONTACT: MEDIA CONTACTS:
ATG:
Victor Beck, 617-386-1246
vbeck@atg.com
or
Primus Knowledge Solutions, Inc.
Kristin Treat, 206-834-8325
ktreat@primus.com
or
INVESTOR CONTACTS:
ATG:
Ed Terino, 617-386-1005
eterino@atg.com
or
Primus Knowledge Solutions, Inc.
Ron Stevens, 206-834-8341
rstevens@primus.com