WOw. Did everybody see this news on DBCC's merger with Financial Times Management? Revenues to triple. Cash flow to quintuple. Earnings to almost double. We've got to ask Kim for a new price target. Gotta believe the stock's gonna run. Russ
Tuesday November 30, 11:02 am Eastern Time
Company Press Release
Merger of Data Broadcasting and Financial Times Asset Management to Increase Annual Cash Flow Five-fold to More Than $70 Million
Earnings Before Income Taxes, Depreciation and Amortization Expected to be Accretive, Almost Doubling To $0.77 Per Share
JACKSON, Wyo.--(BUSINESS WIRE)--Nov. 30, 1999-- Data Broadcasting Corp. (Nasdaq:DBCC - news), America's leading provider of real-time financial market data to traders and individual investors, today summarized additional information to assist investors in understanding the significant potential of its previously announced agreement to merge with Financial Times Asset Management (FTAM), part of Pearson plc, the international media company.
Mark Imperiale, president and chief executive officer of Data Broadcasting, said: ''We have received numerous shareholder inquiries regarding the proposed merger of Data Broadcasting and FTAM since the announcement and conference call on Nov. 15, 1999.
''In an effort to better communicate the merger's terms and strategic rationale, we decided to issue this press release which summarizes the discussion held on the conference call. We will also post the release to the dbc.com Web site for reference by our shareholders and the investment community.''
Imperiale continued: ''The principle strategic reasons for the merger are scale, accretion of cash flow per share, cross marketing, international expansion, content enhancement, branding and cooperative opportunities among Data Broadcasting, FTAM, Financial Times group, MarketWatch.com, ft.com, Pearson and CBS Broadcasting.''
Imperiale said that the company believes the following benefits will be derived from the merger:
-- Scale: The combination of the businesses creates a powerhouse in
size and profitability, with the potential to become a top-tier
provider of financial information globally. Revenues will triple
and cash flow will increase five-fold, exclusive of any
significant revenue and cost synergies, and the combined company
will be debt free. This will give Data Broadcasting the scale to
develop new products and make additional, significant
acquisitions.
-- Accretion: For Data Broadcasting's fiscal year ended June 30,
1999, cash flow (EBITDA) was $14.1 million, or $0.40 per share on
35 million average outstanding shares. For the twelve months
ending December 31, 1999, pro forma cash flow is expected to be
more than $70 million, or $0.77 per share on 91.5 million average
outstanding shares.
-- Cross Marketing: FTAM's client base of some 3,000 institutions in
North America and 8,000 worldwide provide an outstanding
opportunity for sales of Data Broadcasting's BondEdge, InSite and
eSignal products.
-- International Expansion: With FTAM's existing presence in London,
Melbourne, Singapore, Hong Kong, Manila, Edinburgh, Brussels and
other European cities, Data Broadcasting will, for the first
time, have the opportunity to aggressively market its products on
a global basis.
-- Content: FTAM's databases on more than 3.5 million securities,
including international securities, historical pricing, corporate
action and dividend information, will give Data Broadcasting
significant competitive advantages in its products.
-- Branding: Association with the Financial Times brand will
significantly increase the value proposition and recognition of
Data Broadcasting's products. When Data Broadcasting formed its
MarketWatch joint venture with CBS, the company experienced
first-hand the power of brand association.
-- Cooperation: The merger will pave the way for greater cooperation
among Data Broadcasting, FTAM, Financial Times group,
CBS.MarketWatch.com, ft.com, Pearson and CBS.
In addition to describing the strategic rationale of the merger, the company clarified the merger transaction itself. To accomplish the merger, Data Broadcasting will issue 56.5 million new shares of its common stock to Pearson, increasing total outstanding shares to approximately 91.5 million.
As a result, Pearson will own 60 percent of Data Broadcasting, which will continue to trade on Nasdaq under the ticker symbol DBCC. Each of the businesses has been growing revenues in the 5 percent to 10 percent range, and combined are expected to accelerate that growth.
FTAM is a leading source of comprehensive disclosure data, factor information and independent valuations for a comprehensive range of U.S. securities, and offers full descriptive information of more than two million U.S. municipal bonds. It also collects and distributes corporate action information on equities and bonds all over the world, specializing in ''hard to get'' information from emerging markets.
FTAM is part of the Financial Times group, which also consists of the Financial Times newspaper, ft.com, and interests in FTSE International, AFX News, the Economist magazine, Les Echos and BDFM.
The Financial Times group is part of Pearson plc, the international media company, which also owns Pearson Education, the world's leading education company; Pearson Television, the world's leading international independent television production company; the Penguin group, the world's most renowned English-language publisher; and Recoletos, one of Spain's leading media companies.
Data Broadcasting Corporation is the leading provider of real-time market data to the individual trader and investor. The company delivers real-time stock quotes, financial information and news to the PCs, laptops and hand-held devices of millions of users via the Internet, dedicated lines, wireless FM, cable and satellite.
With the BondEdge service from its Capital Management Sciences division, Data Broadcasting also is the leading provider of fixed income portfolio analytics used for valuation and risk management purposes. Data Broadcasting's Internet presence includes www.dbc.com, www.eSignal.com, cbs.marketwatch.com, insite.dbc.com, www.bondedge.com, sports.dbc.com and www.dbceuro.com.
Matters discussed in this release include forward-looking statements that involve risks and uncertainties, and actual results may be materially different. Factors that could cause actual results to differ include the response of competitors to the company's new services, acceptance of the Internet as a valid real-time distribution platform by institutional customers, activity levels in the securities markets and other risk factors listed in the Company's 10-K and 10-Q reports to the Securities and Exchange Commission.
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