I guess I'm the only fool around here holding ISCG? Not even enough premium to make me whole........
First Consulting Group and Integrated Systems Consulting Group to Merge
LONG BEACH, Calif.--(BUSINESS WIRE)--Sept. 9, 1998--
Combined Entities to Provide Broad Operations Improvement and Information Management Services to the Converging Healthcare Services and Pharmaceutical Industries
First Consulting Group Inc. (NASDAQ:FCGI), a leading provider of operations improvement and information management services for the healthcare industry, and Integrated Systems Consulting Group Inc. (NASDAQ:ISCG), a leading provider of application development, document management and network integration services predominately for the pharmaceutical industry, Wednesday announced a definitive merger agreement. This transaction, which is valued at $123.8 million based on Tuesday's closing price of FCG's common stock and the approximately 9 million fully diluted shares outstanding of ISCG common stock, will significantly enhance FCG's breadth of coverage in the increasingly interrelated healthcare services and pharmaceutical industries. It also strengthens the company's application development capability in client-server architecture, Web-based applications, object-oriented and relational databases, and cross-platform systems integration. The combined companies had a pro forma 1998 first half annualized revenue run rate of $180.1 million and more than 1,300 employees as of June 30, 1998. Under the terms of the agreement, which is subject to approval of both FCG and ISCG shareholders and customary closing conditions, each outstanding share of ISCG common stock will be exchanged at a fixed exchange rate of 0.77 for a newly issued share of FCGI common stock. Completion of the merger is expected in the fourth quarter of 1998. The parties expect the transaction, which was unanimously approved by the boards of directors of both companies, to be accretive to 1998 earnings per share, excluding one-time costs relating to the merger. "The next wave of healthcare will see increasing interaction among genetic engineering, drug development, disease management and care delivery," said James A. Reep, FCG's chairman and chief executive officer. "This merger gives us strong positions in each of the major worldwide healthcare services segments: healthcare delivery, physician organizations, health plans, government-based healthcare, pharmaceuticals and biotechnology. ISCG gives us a major leap forward to become a leader in the global 21st century integrated health and human services industry," Reep added. David S. Lipson, chairman and chief executive officer of ISCG explained, "We think that the combination of FCG's broad industry expertise, information technology strategic planning skills and program management methods with ISCG's deep information technology skills will allow us to significantly broaden the range and scope of our services. "We are very pleased to have found a partner with a similar corporate culture and an unquestioned commitment to client satisfaction and results, employee development and practice research," Lipson added. Upon completion of the transaction, Reep will continue as chairman, president and chief executive officer of the combined firm and Lipson will become vice chairman and managing director of the pharmaceutical and life sciences practice. The transaction is intended to be accounted for as a pooling-of-interests and is intended to qualify as a tax-free reorganization. Shareholders representing approximately 56.6 percent and 27 percent of the common stock outstanding of ISCG and First Consulting Group respectively have signed irrevocable proxies to vote in favor of the merger. FCG was advised by Hambrecht & Quist LLC and ISCG was advised by Robert W. Baird & Co. Inc., each of whom has rendered an opinion that the exchange ratio is fair to its respective client shareholders. The merged organizations will provide consulting, systems development and integration, and management services to the healthcare services and pharmaceutical industries through 27 offices serving North America and Europe. The firm's services are designed to increase its clients' operations effectiveness resulting in reduced costs, improved customer service, enhanced quality of patient care and the more rapid introduction of new pharmaceutical compounds. *T First Consulting Group Inc. Integrated Systems Consulting Group Inc. Fact Sheet
First Consulting Group Inc.
Stock Symbol: FCGI
Top Management: James A. Reep, chairman & chief executive officer Luther J. Nussbaum, executive vice president Steven Heck, executive vice president Thomas A. Reep, chief financial officer
Number of Offices: 23
Number of Employees: 707
Headquarters: Long Beach, Calif.
Weighted Average Diluted Shares Outstanding: 15.372 million
1998 First Half Highlights: Net revenue: $60,386 Net income: $3,704 Earnings per share: $0.24
Integrated Systems Consulting Group
Stock Symbol: ISCG
Top Management: David S. Lipson, chairman, president & chief executive officer Jay M. Rose, chief operating officer David D. Gathman, chief financial officer
Number of Offices: 4
Number of Employees: 600
Headquarters: Wayne, Pa.
Weighted Average Diluted Shares Outstanding: 9.045 million
1998 First Half Highlights: Revenues: $29,673 Net income: $2,206 Earnings per share: $0.25
*T
Except for the historical information contained herein, this news release contains forward-looking statements, including, without limitation, statements containing the words, "believes," "anticipates," "expects" and words of similar import. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of FCG or ISCG, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others: the importance of attracting and retaining personnel; variability of operating results; potential inability to maintain business relationships; significant investment of resources in marketing; competition in the healthcare consulting and information technology industry; management of the combined company's growth; consolidation and cost pressures in the healthcare and life sciences industries; regulatory and technological change in the healthcare and information technology industries; expansion into international consulting; integration of acquired businesses and personnel; dependence on key employees; limited protection of proprietary information; control by existing stockholders and management and other factors referenced in FCG's Prospectus, dated Feb. 13, 1998, and each company's 10Q for the quarter ended June 30, 1998.
CONTACT: First Consulting Group, Long Beach Luther Nussbaum, 562/624-5220 Jim Reep, 562/624-5205 or Integrated Systems Consulting Group, Wayne David Lipson or David Gathman 610/989-7000
KEYWORD: CALIFORNIA PENNSYLVANIA INDUSTRY KEYWORD: PHARMACEUTICAL MEDICINE MERGERS/ACQ Today's News On The Net - Business Wire's full file on the Internet with Hyperlinks to your home page. URL: businesswire.com
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