COMPUTERSHARE ACQUIRES SPECIALIST STOCK PLAN MANAGEMENT BUSINESS

Transcription

1 MARKET ANNOUNCEMENT COMPUTERSHARE ACQUIRES SPECIALIST STOCK PLAN MANAGEMENT BUSINESS 19 February Computershare Limited (ASX: CPU) announced today its acquisition of US-based Transcentive Inc., for A$31.2 million net in cash ($US24 million). The deal has the approval of the Boards of Directors of both companies. Transcentive reported revenues of US$19 million for calendar year The acquisition is not expected to materially impact earnings per share in the short term. When fully integrated it is expected that margins will be around 20% excluding additional potential revenue streams arising from crossselling opportunities. It is expected that the acquisition will ultimately involve some integration of administration, sales and marketing functions, as well as offering opportunities to combine share plan management businesses and to realise cost savings through synergies between companies. Transcentive employs 140 staff in administration, sales and marketing, support and development and provides comprehensive solutions for equity plan administration and financial reporting. They have a client base of approximately 3000 organisations that includes 48% of Fortune 1000 companies. The company delivers equity plan administration, communication and financial reporting products and services, both directly and through third parties such as brokers. They also have strong alliances with legal, professional services and consulting firms for the delivery of expert company-specific tax and compliance elements. Computershare s CEO Chris Morris said, We have had a long relationship with this company and a great deal of time has been spent evaluating this deal. He added that, Transcentive s plan management system and its strong third-party relationships provide a good fit into the Computershare group globally and to our technology suite and our employee share plan management business in particular. This acquisition puts us in a strong position to cross-sell and up-sell the Transcentive products to our existing client base. It also solidifies Computershare s position in the fast-growing market of employee share and option plan management services. With offices in Shelton, Connecticut, as well as in San Francisco and London, Transcentive s products and services support the needs of company/corporate secretaries, tax officers, compliance officers and HR personnel for clients in the US, Europe, Asia and the Middle East. These include such companies as Microsoft, Bausch & Lomb, Merrill Lynch and Campbell Soup Company, in total representing 45% of Fortune 100 companies and over 40% of the Fortune 500 companies. Since its founding over two decades ago, Transcentive has demonstrated product leadership and innovation, and amassed significant commercial experience, said Steven Rothbloom, President and CEO of Computershare North America. Transcentive and Computershare are a near-perfect match, combining technology expertise with the capacity to provide solutions in equity compensation management globally. Les Trachtman, President and CEO of Transcentive, who will continue in this role following the acquisition, welcomed the move. Our vision has been to offer flexible yet comprehensive services suited to the unique needs of each customer. Given Computershare s reach and presence in markets around the world, this moves us further onto the world stage, giving us a huge new potential market for our services and solutions, he said. Additional details regarding Transcentive Inc s businesses are attached to this announcement and are also presented on Computershare s website at

2 About Transcentive, Inc. Transcentive is the leading provider of solutions for equity plan administration and financial reporting. With 25 years of experience, the company provides management solutions to nearly 3,000 public and private companies around the world specialising in equity compensation administration. Clients include: Microsoft (NASDAQ: MSFT), Bausch & Lomb (NYSE: BOL), Merrill Lynch (NYSE: MER), and Campbell Soup Company (NYSE: CPB). Headquartered in Shelton, Connecticut, the company has a west coast office in San Francisco and a UK office in London. Additional information may be found at About Computershare Computershare is a leading financial services and technology provider for the global securities industry, providing services and solutions to listed companies, investors, employees, exchanges and other financial institutions. It is the only global share registrar, managing more than 60 million shareholder accounts for over 7,000 corporations in ten countries on five continents. Computershare is the only truly global provider of employee stock/share purchase and stock/share option plan services, managing over 3 million accounts for in excess of 860 clients, with global plan participation in more than 100 countries, covering every major time zone. Founded in Australia, the company today employs over 6,000 people worldwide and is an Australia Stock Exchange Top 100 company. For further information, go to Contact Australia USA Dudley Chamberlain Juli Bark Head of Investor Relations Head of North American Marketing (Office) (0)

3 Business Overview Transcentive Inc. 19 February

4 Contents Transcentive profile Client base Products Fit with Computershare Financials 2

5 Transcentive profile Founded in US in 1979 Headquartered in Connecticut; offices in San Francisco & London Specialist focus Industry s first equity compensation software application Entity management - automated stock plan management, administration, communication and financial reporting Online and offline customer care infrastructure Education and training services for stock plan professionals Won Deloitte and Touche Fast Tech 50 Award consecutively for last five years Voted top 500 company, Software Magazine 3

6 Transcentive staffing Administration 15 Sales & marketing 40 Business support/services 40 Development 45 Total 140 4

7 Transcentive client base Total client base of nearly 3000 entities Majority US-based with a number of international clients Mix of private and listed Served directly or indirectly via third-party partnerships Service 48% of Fortune 1000 companies 5

8 Transcentive products EOWin software Employee share plan administration system, sold as a software package Software sales, maintenance revenue and consulting More than 2,600 clients served directly or indirectly Generates 75% of current revenue 6

9 Transcentive products Outsourcing Service Administration of company plans Similar to Computershare plans administration model 63 clients with total of 84 plans 7

10 Transcentive products Transcentive Web Platform New ASP plans administration system, released in 2003 Specifically designed to service clients in an ASP model using the latest Internet technology Multinational tracking of equity plan participants for global entities 22 clients already - all served directly 8

11 Transcentive products World Records Web-based, global entity management solution tracks, retrieves, reports and disseminates all corporate records pertaining to directors, officers, shareholders & subsidiaries Allows entities to fulfil corporate compliance and reporting Supports corporate secretary/tax/legal/compliance/hr 120 clients Product used by 10 of Fortune 50 companies. 9

12 Transcentive products Customer support services Education and training - Transcentive University Live and remote learning options Equips equity compensation professionals with best-practice skills & knowledge Customer care - Solutions Central Technical support both live and via the web-based Find Answers Q&A Networking Value-added services to support product offering 10

13 Transcentive fit with Computershare Strong alignment of infrastructure and business model Strengthens North American presence Potential to sell full outsourcing or ASP model to client base Will enhance our global offering considerably Skilled and knowledgeable staff Complements ESP solutions we deliver Strengthens options service delivery Primary focus ESP administration, financial reporting and communications Secondary focus supporting management of company secretarial/corporate office function Strong synergy with Computershare technology suite Strong cross-sell ability to Computershare transfer agent clients 11

14 Transcentive financials Revenue of US$19m in calendar year 2003 No material impact on earnings per share Recurring revenue is 70% of total revenue 25% of revenue reinvested into R&D Synergies when integrated with CPU Administration Merging of outsourcing with CPU Plan managers Integration of sales and marketing functions Savings in technology expense for both parties When integrated would expect margins of 20% plus cross-sell opportunities 12