EXHIBIT 99
CUC INTERNATIONAL INC. TO ACQUIRE
DAVIDSON & ASSOCIATES, INC. AND SIERRA ON-LINE, INC.
COMBINATIONS WITH LEADING EDUCATIONAL AND ENTERTAINMENT
SOFTWARE COMPANIES POSITION CUC TO BE AMONG THE TOP CONTENT
PROVIDERS IN THE INTERACTIVE WORLD
Stamford, CT -- February 20, 1996 -- CUC International Inc. (NYSE:CU)
announced today that it has signed definitive merger agreements to acquire (in
separate transactions) two leading software companies, a strategic move that
will broaden the Company's product offerings to include entertainment and
educational content, in addition to its existing membership services.
Separately, the Company said it has completed its acquisition of Rent Net, which
offers nationwide apartment rental information on the Internet.
CUC International plans to acquire Davidson & Associates Inc.
(NASDAQ:DAVD) the Torrance, CA based leading publisher and distributor of
educational software in a transaction valued at approximately $1.14 billion. CUC
International also intends to acquire Sierra On-Line, Inc. (NASDAQ:SIER), the
Bellevue, WA based leading entertainment software company in a transaction
valued at approximately $1.06 billion. These valuations are based on the $37.50
closing price of CUC Common Stock on February 16, 1996. CUC International said
the senior management of Davidson and Sierra On-Line will remain after the
acquisitions are completed.
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February 20, 1996/Page 6
Under the terms of the respective agreements, CUC International plans to
issue .85 share of its common stock ("CUC Common Stock") for each share of
Davidson Common Stock and 1.225 shares of CUC Common Stock for each share of
Sierra On-Line Common Stock outstanding on the respective effective dates of the
proposed mergers. As of February 16, 1996, Davidson had approximately 36 million
shares of Common Stock outstanding and Sierra On-Line had approximately 20
million shares of Common Stock outstanding. CUC International intends to account
for each of the Davidson and Sierra On-Line acquisitions as a
"pooling-of-interests." It is anticipated that the acquisitions of Davidson and
Sierra On-Line will be completed in the second quarter of CUC International's
fiscal year ending January 31, 1997.
TRANSACTION BENEFITS OUTLINED
Walter A. Forbes, chairman and chief executive officer of CUC
International, stated, "Our goal is to be the nation's leader in content across
all areas of consumer spending in the electronic marketplace. We are making
these acquisitions for four reasons:
"First, we strongly believe that the rapidly expanding PC and
interactive platforms worldwide are the future growth engines for how consumers
will access information and conduct commerce.
"Second, education and entertainment are two of the fastest
growing areas of consumer spending, and Davidson and Sierra
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February 20, 1996/Page 7
On-Line are preeminent in these sectors. Their products are ideally suited for
the rapid penetration of the PC and Internet into consumers' homes. In addition,
the Internet offerings of these companies are impressive, including a pipeline
of exciting services in development.
"Third, CUC International has an unparalleled track record of providing
high-quality goods and services to consumers in both traditional and interactive
ways.
"And, fourth, combined with our plans for the electronic marketplace,
these acquisitions will enable CUC International to broaden our content reach
beyond our current offerings to establish one of the most compelling content
areas in the interactive world - one that combines education, entertainment,
value-oriented offerings and the ability to transact."
Mr. Forbes added, "We believe strongly that our core business of
offering consumer services, such as auto, travel and shopping, through
membership systems will thrive in this fast- developing consumer marketplace. We
are committed to building those systems, including exploration of the membership
model in the education and entertainment areas."
DAVIDSON AND SIERRA ON-LINE OFFER STRENGTH
IN PRODUCT, DISTRIBUTION AND FINANCIAL PERFORMANCE
Mr. Forbes pointed out, "Through the acquisitions of
Davidson and Sierra On-Line we will unite the efforts of the
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February 20, 1996/Page 8
highest-quality educational and entertainment software companies, while enabling
each to retain its distinct identity and autonomous development teams. Both
companies are financially strong, have brand-name franchises and extensive
distribution channels.
As these companies coordinate their talent, product lines and
distribution channels, we believe we will create a software presence with an
unparalleled content offering."
Davidson's success in educational software stems primarily from its
ability to combine educational and entertainment elements into its programs.
Founded by Dr. Jan Davidson, a nationally-recognized leader in educational
software, Davidson has established a successful brand-name product line in
educational software, as well as an exciting entertainment division. Currently,
the Company offers over 100 titles in educational and entertainment software,
including popular programs such as the Math Blaster series and Warcraft series.
Additionally, Davidson's extensive distribution channels include specialty
retailers, mass merchandisers and discounters and schools.
Bob Davidson, chairman and CEO of Davidson & Associates,
Inc. stated "CUC is clearly a leader in online sales and
distribution; Davidson is clearly a leader in educational and
entertainment media software. This merger allows us to be a
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February 20, 1996/Page 9
leader in what we believe will be the inevitable consolidation of
the multimedia industry. The combination of these strengths will
result in expanded opportunities for both companies."
Sierra On-Line's founders, Ken and Roberta Williams, are considered
pioneers in the worldwide entertainment software market. Today, Sierra On-Line's
leading market presence in entertainment software also stems from its portfolio
of creative and diverse programs, including hits such as Phantasmagoria and
King's Quest series. By building brand loyalty through product series and
extensive distribution channels, Sierra On-Line has established the foundation
for continued growth in this sector. Sierra On-Line has also created educational
and productivity divisions which, when combined with the strengths of Davidson,
should enable the two companies to develop exciting programs that are ideally
suited for the interactive world. Both companies, like CUC International, are
also experiencing rapid international growth.
"This acquisition represents an opportunity for Sierra to capitalize on
what we already do extremely well; develop the highest quality interactive
entertainment, education and productivity titles in the industry," says Ken
Williams, CEO of Sierra. "CUC brings potentially 40 million new consumers into
the interactive marketplace. We're looking forward to growing
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February 20, 1996/Page 10
this business with CUC and reaching every one of those new
customers."
CUC INTERNATIONAL CLOSES ACQUISITION OF RENT NET
In a transaction that further expands CUC International's interactive
presence, the Company also announced that it has completed its acquisition of
Rent Net by purchasing substantially all of its assets.
Based in San Francisco, CA, Rent Net is a privately-held company which
has developed a nationwide advertisement network on the Internet that focuses on
offering apartment rentals. By combining local maps, color pictures and timely
information, Rent Net's software enables consumers to simplify and improve the
way they search for apartments. CUC believes this software engine has broad
implications for consumers on the Internet and can be applied to additional
categories of consumer information as well as the Company's other content
offering.
TERMS OF ACQUISITION OUTLINED
CUC International plans to effect the acquisition of Davidson &
Associates and Sierra On-Line through mergers of newly-formed, wholly-owned
acquisition subsidiaries into Davidson & Associates and Sierra On-Line,
respectively. The acquisitions of Davidson and Sierra On-Line, which are
intended to be tax-free to the Davidson and Sierra On-Line stockholders,
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February 20, 1996/Page 11
are subject to customary closing conditions, including the expiration of any
applicable waiting period under the Hart-Scott- Rodino Antitrust Improvements
Act of 1976, the filing and effectiveness of an S-4 Registration Statement and
the requisite approval of the holders of the Davidson and Sierra On-Line Common
Stock. Meetings of such stockholders are anticipated to occur in late spring.
CUC International will not be seeking the approval of the holders of CUC Common
Stock to either of these transactions.
The Davidson and Sierra On-Line Boards of Directors have the right to
terminate the respective merger agreements (among other customary circumstances)
if the average price per share of CUC Common Stock in specified periods prior to
their respective stockholders' meetings is below $29.
Certain affiliates of Davidson and Sierra On-Line (holding an aggregate
of approximately 75% and 8%, respectively, of the Davidson and Sierra On-Line
outstanding Common Stock) have agreed to vote their shares in favor of
respective mergers. The affiliates of Davidson are not obligated to do so,
however, if the average price per share of CUC Common Stock falls below the
threshold referred to above.
Neither transaction is contingent upon the consummation of
the other transaction. CUC International completed its
acquisition of Rent Net on February 6, 1996. In this
February 20, 1996/Page 12
transaction, CUC International paid $1,000,000 in cash and $2,000,000 in CUC
Common Stock. The selling partnership is also eligible to receive certain
additional payments based on the results of the Rent Net business.
CUC International (NYSE: CU) is a Stamford-CT based, technology-driven
retail and membership services company that provides access to travel, shopping,
auto, dining, home improvement, financial and other services to nearly 40
million consumers worldwide. The company has been a pioneer in the electronic
marketplace for almost two decades and is a leading content provider across all
areas of interactive commerce. CUC International was recently ranked the #1
Advertising and Marketing company in America by Fortune's 1996 America's Most
Admired Companies survey.
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