-
Combining strengths will provide a comprehensive and compelling set
of multi-channel supporter engagement solutions to nonprofit
organizations of all sizes
-
Combined company has over $440 million in trailing twelve months
pro-forma revenue (9/30/11)
-
Acquisition expected to be accretive to Blackbaud’s 2012 non-GAAP
EPS and contribute to substantial free cash flow
CHARLESTON, S.C. & AUSTIN, Texas--(BUSINESS WIRE)--Jan. 17, 2012--
Blackbaud, Inc. (NASDAQ: BLKB), the leading provider of software and
related services designed for nonprofit organizations, announced today
that it has entered into a definitive merger agreement with Convio, Inc.
(NASDAQ: CNVO), a leading provider of on-demand constituent engagement
solutions that enable nonprofit organizations to more effectively raise
funds, advocate for change and cultivate relationships.
Blackbaud and Convio share the belief that fully engaged supporters
drive maximum value for nonprofit organizations. The acquisition of
Convio will combine the two companies’ strengths to accomplish a common
mission – making multi-channel supporter engagement a reality – at a
faster pace than either company could achieve on its own. With nonprofit
supporters acting across multiple channels, including receiving
messages, donating, and advocating, across websites, social networks,
email, mobile, events and direct mail, solutions must be designed to
deliver optimum engagement across channels. Convio’s strength in online
and social is a perfect complement to Blackbaud’s expertise, and its
addition will enable Blackbaud to better serve nonprofit organizations.
Under the terms of the agreement, Blackbaud will acquire all outstanding
shares of common stock of Convio for $16.00 per share, representing a
premium of 49% compared to Convio’s recent closing price and an
enterprise value of approximately $275 million (based on fully diluted
shares). Blackbaud will finance the deal through a combination of cash
and debt. In addition to providing meaningful and immediate value for
Convio’s shareholders, the transaction is expected to be accretive to
Blackbaud’s non-GAAP financial results for the full year 2012 and
increasingly so in future years.
The board of directors of both companies have unanimously approved the
transaction. The acquisition is structured as a cash tender offer
followed by a merger, and is expected to close during the first quarter
of 2012. All Convio directors and officers and certain of its affiliates
(representing over 30% of Convio’s total outstanding shares) have agreed
to tender all of their respective shares subject to tender and support
agreements. The consummation of the tender offer is subject to various
conditions, including a minimum tender of at least a majority of
outstanding Convio shares on a fully diluted basis, the expiration or
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act, and other customary conditions.
Marc Chardon, Blackbaud's President and CEO, said, "We are extremely
excited to announce our agreement to acquire Convio, which is a
significant event for both companies. We fully expect that Convio’s
best-in-class, SaaS-based capabilities for large events, advocacy and
federated organizations will enable Blackbaud to offer the industry’s
most diverse and flexible set of online capabilities on a global basis.
Moreover, the addition of Convio will broaden Blackbaud’s application
portfolio, enabling the combined company to offer a comprehensive set of
multi-channel supporter engagement solutions to nonprofit organizations
of all sizes.”
Chardon added, “Combining Convio and Blackbaud is expected to help
create one of the largest SaaS vendors with over $440 million in
trailing twelve months pro forma revenue. The strength and complementary
nature of our combined value proposition will position Blackbaud well to
capitalize on the large and underpenetrated market for delivering
innovative solutions to the nonprofit industry.”
Convio’s products enable nonprofit organizations to harness the full
potential of the Internet and social media as new channels for
constituent engagement and fundraising. Convio has over 1,500 customers
in the U.S., Canada and the U.K., including 29 of the top 50 U.S.
charities. In 2010 alone, Convio’s U.S. clients used its software and
services to raise more than $1.3 billion online, send more than 4
billion emails, power more than 32 million advocacy actions and manage
relationships with more than 248 million constituents.
Gene Austin, Convio’s President and CEO, said, “We expect the
combination of Convio and Blackbaud to provide large nonprofit
organizations with the best of both worlds, the industry’s strongest
online fundraising solution along with market leading CRM capabilities.
Our respective solutions, areas of vertical expertise and customer bases
are highly complementary, and we have received many customer requests to
integrate our capabilities over the years. We will now be able to meet
this market demand and provide both of our customer bases with access to
a broad and deep application suite designed specifically for nonprofit
organizations.”
After the acquisition closes, Austin will take on a leadership role at
Blackbaud, reporting to Marc Chardon.
BofA Merrill Lynch is acting as the exclusive financial advisor with
Wyrick Robbins Yates & Ponton LLP and Davis Polk & Wardell LLP serving
as the legal advisors to Blackbaud. JPMorgan Chase Bank, N.A., SunTrust
Bank and BofA Merrill Lynch are providing financing to Blackbaud for
this transaction. J.P. Morgan Securities LLC is acting as lead arranger
and lead bookrunner, with SunTrust Robinson Humphrey, Inc. acting as a
joint lead arranger and joint bookrunner. Stifel, Nicolaus & Company,
Incorporated is acting as the exclusive financial advisor with DLA Piper
LLP (US) serving as the legal advisors to Convio.
Financial overview of transaction and combined company
Pro Forma Combined Company Financial Profile (trailing twelve months
ended 9/30/2011, non- GAAP, unaudited)
-
$440 million in revenue
-
$94.9 million in adjusted EBITDA
-
Free cash flow of $66.5 million*
*Cash from operations of $83.0 million less capital expenditures of
$16.5 million
The acquisition of Convio will be funded by a combination of Blackbaud’s
existing cash balance, expansion and extension of the company’s current
debt facility, as well as newly issued syndicated debt. After closing
the acquisition, the combined company is expected to have net debt of
approximately $240 million, which represents approximately 2.5x proforma
consolidated adjusted EBITDA for the twelve months ended September 30,
2011.
Tony Boor, Blackbaud's Senior Vice President and Chief Financial
Officer, stated, "In addition to the strategic reasons supporting the
acquisition of Convio, we believe it is also highly attractive from a
financial perspective. We expect the transaction to have an accretive
impact on our non-GAAP diluted earnings per share for the full year
2012, and even more so in future years as we realize efficiencies from
integrating our companies. The addition of Convio will also
significantly increase the size of Blackbaud’s subscription revenue and
further strengthen our SaaS and transactional offerings.”
Boor added, “We are very confident in the company’s ability to service
its new debt balance due to our free cash flow being much greater than
our expected cash interest expense, in addition to the fact that we
expect further enhancements of our cash flow following the acquisition
and integration of Convio.”
Conference Call Details
Blackbaud will host a conference call today, January 17, 2012, at 8:15
a.m. (Eastern Time) to discuss the acquisition. To access this call,
dial 877-857-6149 (domestic) or 719-325-4894 (international). A replay
of the conference call will be available through January 24, 2012 at
877-870-5176 (domestic) or 858-384-5517 (international). The replay
passcode is 3746993. A live webcast of this conference call will be
available on the "Investor Relations" page of the Company's website at www.blackbaud.com/investorrelations,
and a replay will be archived on the website as well.
About Blackbaud
Serving the nonprofit and education sectors for 30 years, Blackbaud
(NASDAQ: BLKB) combines technology and expertise to help organizations
achieve their missions. Blackbaud works with more than 25,000 customers
in over 60 countries that support higher education, healthcare, human
services, arts and culture, faith, the environment, independent K-12
education, animal welfare, and other charitable causes. The company
offers a full spectrum of cloud-based and on-premise software solutions
and related services for organizations of all sizes including:
fundraising, eMarketing, social media, advocacy, constituent
relationship management (CRM), analytics, financial management, and
vertical-specific solutions. Using Blackbaud technology, these
organizations raise more than $100 billion each year. Recognized as a
top company by Forbes, InformationWeek, and Software Magazine and
honored by Best Places to Work, Blackbaud is headquartered in
Charleston, South Carolina and has employees throughout the US, and in
Australia, Canada, Hong Kong, Mexico, the Netherlands, and the United
Kingdom. For more information, visit www.blackbaud.com.
About Convio
Convio is a leading provider of on-demand constituent engagement
solutions that enable nonprofit organizations to maximize the value of
every relationship. With Convio constituent engagement solutions,
nonprofits can more effectively raise funds, advocate for change and
cultivate relationships with donors, activists, volunteers, event
participants, alumni and other constituents. Convio offers two open,
cloud-based constituent engagement solutions: Convio Common Ground CRM™
for small- and mid-sized nonprofits and Convio Luminate™ for enterprise
nonprofits. Headquartered in Austin, Texas with offices across the
United States and United Kingdom, Convio serves more than 1,500
nonprofit organizations globally. Convio is listed on the NASDAQ Global
Market under the symbol CNVO. For more information, please visit www.convio.com.
Forward-looking Statements
Except for historical information, all of the statements, expectations,
and assumptions contained in this news release are forward-looking
statements that involve a number of risks and uncertainties. Although we
attempt to be accurate in making these forward-looking statements, it is
possible that future circumstances might differ from the assumptions on
which such statements are based. In addition, other important factors
that could cause results to differ materially include the following:
risks that the Convio merger will not close or that its expected
benefits will not be achieved (including risks that the tender offer is
not successful or that the related debt financing, regulatory approvals
and consents are not obtained); general economic risks; uncertainty
regarding increased business and renewals from existing customers;
continued success in sales growth; management of integration of acquired
companies and other risks associated with acquisitions; risks associated
with successful implementation of multiple integrated software products;
the ability to attract and retain key personnel; risks related to our
dividend policy and share repurchase program, including potential
limitations on our ability to grow and the possibility that we might
discontinue payment of dividends; risks relating to restrictions imposed
by the credit facility; risks associated with management of growth;
lengthy sales and implementation cycles, particularly in larger
organizations; technological changes that make our products and services
less competitive; and the other risk factors set forth from time to time
in the SEC filings for Blackbaud and Convio, copies of which are
available free of charge at the SEC’s website at www.sec.gov
or upon request from Blackbaud's investor relations department (with
respect to Blackbaud filings) or upon request from Convio’s investor
relations department (with respect to Convio filings).
All Blackbaud product names appearing herein are trademarks or
registered trademarks of Blackbaud, Inc.
All Convio product names appearing herein are trademarks or registered
trademarks of Convio, Inc.
Non-GAAP Financial Measures
Blackbaud has provided in this release financial information that has
not been prepared in accordance with GAAP. This information includes
non-GAAP adjusted EBITDA and free cash flow. Blackbaud uses these
non-GAAP financial measures internally in analyzing its financial
results and believes they are useful to investors, as a supplement to
GAAP measures, in evaluating Blackbaud's ongoing operational
performance. Blackbaud believes that the use of these non-GAAP financial
measures provides an additional tool for investors to use in evaluating
ongoing operating results and trends and in comparing its financial
results with other companies in Blackbaud's industry, many of which
present similar non-GAAP financial measures to investors. The non-GAAP
financial results discussed above exclude the following from net income:
interest, taxes, depreciation and amortization, stock-based
compensation, acquisition related costs and certain non-cash and
non-recurring items.
Securities Law Disclosure
The tender offer for the outstanding common stock of Convio has not yet
commenced. This press release is for informational purposes only and is
not an offer to buy or the solicitation of an offer to sell any
securities. The solicitation and the offer to buy shares of Convio
common stock will be made only pursuant to an offer to purchase on
Schedule TO and related materials that Blackbaud intends to file with
the SEC. Convio also intends to file a solicitation/recommendation
statement on Schedule 14D-9 with respect to the offer. Convio
stockholders and other investors should read these materials carefully
when they become available because they will contain important
information, including the terms and conditions of the offer. Convio
stockholders and other investors will be able to obtain copies of these
materials without charge from the SEC through the SEC’s website at www.sec.gov,
from Georgeson Inc., the information agent for the offer, toll-free at
(800) 868-1391 (banks and brokers call (212) 440-9800), from Blackbaud
(with respect to documents filed by Blackbaud with the SEC) by going to
the Investor Relations section of Blackbaud’s website at www.blackbaud.com,
or from Convio (with respect to documents filed by Convio with the SEC)
by going to the Investor Relation’s section of Convio website at www.Convio.com.
Stockholders and other investors are urged to read those materials
carefully prior to making any decisions with respect to the offer.
Source: Blackbaud, Inc.
Investors:
ICR
Tim Dolan, 617-956-6727
timothy.dolan@icrinc.com
or
Media:
Blackbaud
Melanie
Mathos, 843-216-6200 x3307
melanie.mathos@Blackbaud.com
or
Convio
Karoline
McLaughlin, 512-652-7865
kmclaughlin@convio.com