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5.6.2004
Surebridge To Be Acquired By NaviSite, Inc.
Lexington, MA -- May 6, 2004 -- Surebridge, Inc., the leading application outsourcer of on-demand solutions for mid-market companies announced today that it has signed a definitive agreement to be acquired by NaviSite, Inc. (NASDAQ SC: NAVI), a leading technology services provider. Based in Andover, Mass., NaviSite offers a complementary portfolio of managed application services targeting mid to large-market organizations and brings expertise in the areas of managed application and infrastructure services.
Under the terms of the agreement, NaviSite will acquire the assets of Surebridge in exchange for two promissory notes in the aggregate principal amount of $39.5 million (subject to certain adjustments based on the financials of Surebridge at closing), 3 million shares of NaviSite common stock and the assumption of certain liabilities at closing. The closing of the acquisition is expected to occur later this month and is subject to the satisfaction of customary closing conditions.
"Surebridge's product maturity, technical expertise and partnerships with Microsoft and PeopleSoft and stable base of customers with contracted and recurring revenue provides a very strategic fit to the NaviSite operational platform," said Arthur Becker, CEO of NaviSite. "We believe the combined organization will be well-positioned to become a leader in providing a broad range of application services to mid-sized enterprises. We anticipate that this acquisition will add approximately $11 million to our quarterly revenues, and by leveraging our proven operational processes, we expect $3 million to $4 million of EBITDA from the combined company in NaviSite's first quarter of fiscal 2005 ending October 31, 2004."
"By combining our expertise and competency in delivering application management services to the mid-market with NaviSite's proven hosting and operational excellence, we are building a company poised for leadership in the managed application services market," said Peter J. Boni, chairman and CEO of Surebridge. "The complementary nature of our products, target markets and operating platforms make this a compelling proposition for both companies and for our customers."
"Today's NaviSite is a technology services provider with a substantial base of recurring revenues. Our current service portfolio is the result of five acquisitions that we completed during the past two years and have integrated onto one, efficient operational platform," said Becker. "Our ability to integrate acquired service offerings and manage the operations and cost structures of these offerings is reflected in our improved EBITDA profitability results during the past two quarters. With this acquisition we are now positioned to increase our size and customer base and continue the expansion of our portfolio of technology service capabilities. Today's announcement is an important milestone as we strive toward our goal to become a leader in the managed application services market."
About NaviSite, Inc.
NaviSite is a leading provider of outsourced hosting and managed application services for middle-market organizations, which include mid-sized companies, divisions of large multi-national companies, and government agencies.
About Surebridge, Inc.
Surebridge, the leading application outsourcer of On Demand Solutions for mid-market companies, delivers brand name application choice and affordable strategy, implementation, outsourcing and optimization services. Surebridge's complete portfolio comprises CRM, supply chain management, financial management, human resource management and eBusiness applications for Microsoft Business Solutions, PeopleSoft and Siebel Systems. The company was founded in 1997 and is headquartered in Lexington, Mass. For more information, please visit
www.surebridge.com.
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