Proxicom’s shareholders will receive $7.50 in cash for each share of Proxicom stock they own. The aggregate purchase price is $448 million or $378 million taking into account cash on the balance sheet as of March 31, 2001 and without giving effect to the payment of the break-up fee to Compaq. Proxicom will operate as a subsidiary of Dimension Data.
Proxicom, Inc. is a leading e-business consulting and development company that delivers innovative Internet and multi-channel solutions for Fortune 500 companies and other global businesses. The company’s approximately 1,000 strategy, creative and technology professionals provide specialised e-business development expertise.
Under the terms of the merger agreement, Dimension Data will promptly commence a tender offer for all outstanding shares of Proxicom. Any Proxicom shares not acquired by Dimension Data will be acquired in a subsequent merger. The tender offer and merger are subject to customary closing conditions and governmental approvals. The merger agreement is not subject to any financing condition. The acquisition has been approved by the boards of directors of each company. Proxicom’s Chairman and CEO Raul Fernandez and General Atlantic Partners, have agreed to support the transaction and tender their shares pursuant to the offer.
The intention is to appoint Raul Fernandez to the Dimension Data Holdings plc board. Members of the senior management team have signed employment contracts with Dimension Data. Dimension Data plans to retain the talent and employees of Proxicom and incentivise them accordingly to ensure a successful acquisition.
The agreement came after Proxicom terminated its earlier agreement with Compaq Computer Corporation after Compaq stated it would not increase its original offer. As part of the termination agreement, Compaq has received the agreed-upon break-up fee of $10 million.
Dimension Data and Proxicom believe that their combination will result in the establishment of a new model for e-business integration companies, which is rapidly expected to become the norm. The trend in software architecture is to view previously standalone software applications as services on the network. Dimension Data believes that it will be uniquely positioned to address these integration and connectivity requirements for global corporations. It is expected that the transaction will be marginally dilutive to earnings in the first full financial year but accretive thereafter.
The acquisition of Proxicom will enhance our solution offering to the U.S. and the rest of the world, stated Mr. Jeremy Ord, Chief Executive and Chairman of Dimension Data. In addition this will accelerate the visibility of the Dimension Data brand in the U.S. and European marketplaces as a result of the alignment with a highly regarded company that has market leadership and a proven track record as a pioneer in Internet based strategy development and execution. Our customers want one stop shopping for mission critical solutions. Joining forces with Proxicom gives us the scale and resources to play at all levels from infrastructure and network engineering to the development of e-business strategy.
We are delighted to join the Dimension Data team, said Mr. Raul Fernandez, founder, chief executive officer and chairman of Proxicom. Our combination with Dimension Data provides great benefits to our shareholders, customers and employees. Dimension Data significantly expands our global footprint. Through this merger agreement, we can provide more capabilities to our clients and increased opportunities to our employees. We look forward to working with the Dimension Data team to ensure a rapid introduction and seamless integration of our companies.
SOURCE: COMPANY PRESS RELEASE
