Pitney Bowes Inc. signed a definitive agreement to acquire all of the outstanding shares of Group 1 Software, Inc. for $23 per share, which net of cash on Group 1's balance sheet, will cost the company approximately $321 million. Group 1 Software is an industry leader in software that enhances mailing efficiency, data quality and customer communications. Group 1 will become a wholly owned subsidiary of Pitney Bowes within its Global Enterprise Solutions segment, continuing to operate under its current management. Subject to approval by Group 1's stockholders and completion of other conditions, the transaction is expected to close in the third calendar quarter of 2004. Upon completion, Pitney Bowes expects the acquisition to be neutral to accretive to earnings, excluding integration costs, and cash earnings positive in its first twelve months.
This acquisition enhances Pitney Bowes' ability to execute its growth strategies and deliver added value to customers worldwide, according to Michael J. Critelli, Chairman and CEO of Pitney Bowes. "The acquisition of Group 1 Software supports the areas we have previously identified for sustained growth in customer and shareholder value -mailstream expansion, document management, global penetration and cross-selling. Software is an increasingly important part of our value proposition for mailers. Group 1 has a broad range of address management, data quality, document generation and delivery and marketing campaign management software applications that complement our existing mailing software business and products. These capabilities have become even more important in light of the U.S. Postal Service's recent focus on intelligent mail and address quality. It will also expand our mail stream participation by adding 3,000 high- and mid-volume mailing customers worldwide."
Critelli continued, "One of the ways we plan to grow our document management presence is by integrating mail and documents enterprise-wide across multiple customer touch points and business processes, which we call customer communications management (CCM). We feel Group 1's suite of solutions helps lay the foundation for profitable expansion in the $4 billion, and growing, CCM market. Its extensive product line, infrastructure and strong presence outside of the U.S. will enable us to expand our range of mailstream solutions worldwide and also offers an opportunity for cross- selling to our respective customer bases. Our brand promise is engineering the flow of communication. In other words, we help organizations of all sizes get the right message to the right customer or prospect at the lowest possible cost. The acquisition of Group 1 enhances our ability to add value to every piece of mail and its contents by reducing its costs, increasing its effectiveness, and enhancing its impact on customer relationships."
Group 1 Software, headquartered in Lanham, Maryland, began providing postal and direct mail software in 1982. It has a suite of data quality, mailing efficiency, customer communications management and data integration applications that help organizations worldwide maximize the value of their customer and other data. It has leveraged its leadership position in high volume mailing related software by extending into customer communications and data quality solutions that integrate and deliver data across the enterprise. Group 1 offers solutions utilized by leaders in the financial services, banking, retail, telecommunications, utilities, insurance and other industries.
According to Bob Bowen, CEO of Group 1 Software, "We touch growing markets with $8 billion in current revenue and we view this transaction as a very positive step toward growing our participation in these markets. Pitney Bowes' expertise, range of solutions and strong brand recognition in mailing solutions will enable us together to improve the efficiency and effectiveness of customer communications."
Group 1 will file a proxy statement and other documents regarding the proposed merger described in this press release with the U.S. Securities and Exchange Commission ("SEC"). Stockholders are urged to read the proxy statement when it becomes available, because it will contain important information about Group 1, the proposed transaction and related matters. A definitive proxy statement will be sent to security holders of Group 1 seeking their approval of the transaction. Stockholders may obtain a free copy of the definitive proxy statement, when available, and other documents filed by Group 1 and Pitney Bowes Inc. with the SEC at the SEC's web site at www.sec.gov.
Group 1, Pitney Bowes Inc. and their directors, executive officers and certain members of management and other employees may be deemed to be participants in the solicitation of proxies of Group 1 stockholders to approve the proposed merger. Such individuals may have interests in the merger, including as a result of holding options to purchase or shares of Group 1 stock. Certain information regarding the participants and their interest in the solicitation is set forth in the proxy statement for Group 1's 2003 and Pitney Bowes' 2004 annual meeting of stockholders filed with the SEC on August 5, 2003 and March 25, 2004, respectively, and the Form 4s filed by Group 1's and Pitney Bowes' directors, executive officers and certain members of management and other employees since such dates. Stockholders may obtain additional information regarding the interests of such participants by reading the proxy statement relating to the proposed transaction when it becomes available.
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