POSO is today's # short pick. BS acquisition that POSO did a dilutive private placement to pay for:
ProsoftTraining.com to Acquire ComputerPREP; Deal Expands
6/28/0 9:18 (New York)
Prosoft's Revenue, Sales Force, Customer
Base and Course Offerings
Business Editors, Technology Writers
AUSTIN, Texas--(BUSINESS WIRE)--June 28, 2000--ProsoftTraining.com
(Nasdaq: POSO) today announced that it has signed an agreement to
acquire ComputerPREP, Inc. from the privately-held Drake International
Technology Group.
ComputerPREP is one of the largest North American publishers and
distributors of courseware for information technology, offering over
1,000 titles covering topics such as Certified Internet Webmaster
(CIW) certification, A+ certification and Linux courses. CIW is an
Internet skills program administered and branded by
ProsoftTraining.com.
"This acquisition is strategic, tactical and accretive," said
Jerry Baird, chairman and CEO of ProsoftTraining.com. "The expansion
of our product line and the addition of a sales force that is already
one of the largest players in vendor-neutral certification will afford
us broader market opportunity. The minimal account overlap with
ComputerPREP will permit us to take full advantage of their strength
in the corporate and academic markets. We are especially pleased with
the strong market position for A+ certification courseware that this
acquisition provides. In 1999, ComputerPREP had over $4 million in
revenue attributable to the successful A+ vendor-neutral
certification. We now have a more complete offering for our channel."
Key benefits from the acquisition include:
-- Sales Force Expansion: The ComputerPREP acquisition expands
Prosoft's sales force to more than 45 professionals who are
trained to sell technology training courseware. The
ComputerPREP sales force is already familiar with the CIW
curriculum, which it has been selling under license since
1998.
-- Complementary Content: ComputerPREP offers courseware that
complements Prosoft's existing suite of products and services,
including vendor-neutral courseware covering A+ certification
and Linux training, both of which fit well with Prosoft's
vendor-neutral strategic focus.
-- Sales and Marketing Infrastructure and Processes: The
acquisition of ComputerPREP adds sales and marketing
infrastructure, including advanced sales force automation
tools, a state-of-the-art call center, and customer and order
tracking systems which Prosoft can leverage for future growth
of its own products.
-- Expansion of Customer Base and Distribution Channels: With
more than 3,500 active customers, ComputerPREP's customer base
provides the opportunity for growth through cross-selling of
additional content and services. ComputerPREP's established
relationships include training providers, educational
institutions and corporate in-house training departments that
will expand Prosoft's customer base and distribution channels.
Prosoft will acquire ComputerPREP for $30 million, split equally
between cash and stock. The cash portion of the purchase price will
come from a private placement of common stock that was recently
completed. Net proceeds to Prosoft will exceed the cash portion of the
purchase consideration. The excess proceeds will be used for working
capital and general corporate purposes. Outstanding shares of the
company will increase by approximately 3.25 million as a result of
both transactions. Drake International will also receive 600,000
warrants as part of the purchase consideration.
ComputerPREP's parent company, Drake International, is a global
human resources company with over 95,000 employees. Drake provides
training, placement, temporary staffing, and human resource consulting
to clients in the United States, Europe, and Australia and throughout
Asia. In 1991, a subsidiary of Drake created a business to provide
proctored testing for information technology certifications. This
business, which became Sylvan Prometric, was recently acquired by
Thomson Learning and has become the market leader for certification
testing for information technology professionals. Prometric currently
provides tests for certifications from Microsoft, Oracle, A+ and CIW.
For the fiscal year ended October 1, 1999, ComputerPREP had
audited revenue of $14.53 million and reported a loss of $.36 million.
ComputerPREP operates two business units -- technology training
publishing and online training software. According to ComputerPREP
reports, its technology training publishing business unit had revenue
in that period of $13.83 million and a profit of $1.03 million, while
the software business unit had revenue of $.69 million and a loss of
$1.39 million.
Unaudited results for six months ended March 31, 2000 reflect
revenue of $7.63 million and an operating profit of $.05 million. On a
business unit basis, technology training publishing had $7.06 million
in revenue and a profit of $.68 million while the software business
unit had $.57 million in revenue and a loss of $.63 million. Prosoft
intends to discontinue the software business and focus sales efforts
on ComputerPREP's most profitable technology training products. After
also eliminating duplicate revenue items associated with CIW sales,
Prosoft expects incremental revenue of approximately $11 million in
fiscal 2001 as a result of the acquisition. Remaining technology
training products are expected to generate average gross margins of
60%.
Annual payroll costs will immediately decline $2.5 million as a
result of these changes. Prosoft believes that it will be able to
realize additional cost savings from combining the sales and marketing
efforts of the two companies.
Baird continued, "We believe that the acquisition will be
immediately accretive to earnings per share before amortization of
goodwill and accretive to earnings per share including amortization
for the full fiscal year."
Pending government approval, Prosoft expects the transaction to
close by the end of July.
About ProsoftTraining.com
ProsoftTraining.com is an e-learning company that sells education
and certification programs for Internet and Linux professionals. The
company's industry-leading CIW certification program creates and
certifies the skills that today's workforce needs to support the
growth of B2B and B2C applications. Prosoft education programs include
Internet, Linux, security, and networking topics. Each topic is
developed using a design methodology that allows courseware materials
to be delivered in several online and classroom formats. Using a B2B
model, the company distributes its products through one of the largest
classroom and e-learning networks in the industry. Programs are
offered worldwide through an extensive network of authorized training
partners. The network includes leading educators on the Web and in the
classroom. Prosoft's Internet certification programs have the
endorsement of the 8,500-member Association of Internet Professionals
and the 14,000-member International Webmasters Association.
Certification testing is available through the Prometric and VUE
testing networks. Learn more about Prosoft at www.prosofttraining.com.
Learn more about the CIW program at www.CIWcertified.com.
Except for historical information contained herein, the matters
discussed in this press release are statements of a forward-looking
nature that are subject to certain risks and uncertainties that could
cause actual results to differ materially from those projected. Such
risks and uncertainties include, without limitation, the Company's
dependence on the timely development, introduction and acceptance of
courses and products, the impact of competition and downward pricing
pressures, the effect of changing economic conditions, the Company's
ability to attract and retain key management and other personnel,
risks in technology development, continued adoption of Internet
technologies, and the other risks and uncertainties outlined in the
Company's filings with the Securities and Exchange Commission,
including but not limited to the Company's Annual Report on Form 10K.
The Company undertakes no obligation to update this forward-looking
information.
--30--CJG/se*
CONTACT: ProsoftTraining.com
Andrea Quaglietta, 512/328-6140, ext. 208
aquaglietta@prosofttraining.com
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