Filed by Peregrine Systems, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Harbinger Corporation
Commission File No. 0-26298
Conference Call Script
Peregrine/Harbinger Transaction
Thursday, April 6, 2000, 8:00 A.M. EDT
[STEVE GARDNER]
This is Steve Gardner, President and Chief Executive Officer of Peregrine
Systems. The subject of today's call is the announcement made yesterday
afternoon by Peregrine Systems and Harbinger Corporation regarding the
acquisition of Harbinger by Peregrine.
Before we get started, I will first read the following legal statement relative
to forward looking comments:
LEGAL DISCLAIMER
Our discussion today contains historical information and forward
looking information. Numerous factors affect the operating results of either
Peregrine Systems, Inc. or Harbinger Corporation and could cause the either
companies' actual results to differ materially from those indicated in this
discussion or in any other forward looking statements made by, or on behalf of,
the Companies and there can be no assurance that future results will meet
expectation. These factors include, but are not limited to those set forth in
Peregrine Systems, Inc. report on Form 10K, filed with the Securities and
Exchange Commission in June 1999, and on Peregrine Systems, Inc. quarterly
reports on Form 10Q, copies of which are available on request from the Investor
Relations Department of the Company, or on those set forth in Harbinger
Corporation's report on Form 10K, filed with the Securities and Exchange
Commission in March 2000, and on Harbinger's quarterly reports on Form 10Q,
copies of which are available on request from the Investor Relations Department
of Harbinger.
In addition, you should be aware that this call is being taped for playback.
Joining me on the call today are Jim Travers, President and Chief Executive
Officer of Harbinger Corporation, Jim McCormack, CFO of Harbinger, Fred Luddy,
Peregrine's CTO, and David Farley, CFO of Peregrine.
I will start with an overview of the strategic rationale for the transaction,
and then ask Fred to add his perspective on the fit of the two companies from a
product and solution offering perspective. Then Jim Travers will speak to the
reasons behind Harbinger's decision to combine forces with Peregrine, and David
Farley will finish up with a brief financial summary of the transaction.
The combination of Peregrine Systems and Harbinger will create the world's
premier provider of e-Business solutions. Together we will offer customers the
means to create e-business networks, catalogs, and marketplaces, manage the
end-to-end lifecycle of the infrastructure of their entire e-Business
environment, and deploy applications that exploit the power of e-Commerce. We
will be able to help organizations assure e-business success from both an
operational and financial perspective with a combination of software, services,
and e-business on-line offerings that will be second to none.
The blending of Harbinger.net, the world's most advanced e-commerce network,
Harbinger's e-marketplace and Business Connections technology, and the harbinger
ASP solutions offering together with Peregrine's infrastructure management
solution set and our Get.It! e-Procurement and employee self service solutions
creates the lowest risk total
end-to-end approach for any organization seeking to do global e-business. Any
CEO or CIO determined to bring his or her business into the world of e-business
now can choose from the combination of Peregrine and Harbinger a single provider
with complete end to end capabilities, or be faced with selected multiple point
product and service providers and somehow knitting their solutions together. The
Peregrine Harbinger team clearly reduces risk, complexity, and time in creating
an integrated e-business solution.
Together we can build, manage, and deliver the infrastructure, network, and
solutions required for successful e-business solutions.
Together we will have the combined forces of over 2500 people working to assure
our customers of the best possible solutions to their e-business needs.
Together we have the financial strength and profitability to assure our
customers and partners of long-term growth and long-term commitment to
delivering and expanding our solutions.
Together we will be doing business in every major market in the world, in every
major industry and government sector in the world, and to organizations large
and small, working together to attract new customers and to expand our combined
customer base of over 44,000 organizations.
There really are no other companies that will have the depth of solution, the
breadth of delivery, and the proven track record of performance that the
combination of Peregrine and Harbinger will have. We will clearly become the
standard by which others will have to measure themselves in delivering total
end-to-end e-business solutions.
There are those how view Harbinger as representing the past of e-commerce, given
their leadership presence in the world of EDI transactions. We look at this base
of knowledge and experience as the foundation of their credibility and expertise
in unifying the complex world of multiple standards, protocols, and business
processes. We also see a
company whose management team changed dramatically a couple of years ago, and
under Jim Traver's leadership, has focussed tightly and executed brilliantly on
creating the most rapidly growing B2B e-commerce portfolio we could find in the
market. The expansion of Harbinger.net, the growth in their ASP delivery of
solutions, the creation of Business Connection Integration, to weave together
the multiple XML, OBI, and other e-business standards into a rational document
and catalog approach, accessible by any customer, has all led us to see a hidden
jewel inside company with a proven track record of delivery and customer
excellence. What I think is most telling about our conviction is that once the
two companies are combined, we are quite confident that the growth of the new
B2B e-commerce side of Harbinger and Peregrine's growth in the overall
e-Business Solutions area will allow us to still envision combined top line
revenue growth of 45% in future years. And, during this time, we will continue
to leverage the large installed base of first generation e-business customers to
first upgrade them to the world of IP transactions, and secondly, offer them the
full range of Peregrine Systems solutions.
Now to put a little more depth on the nature of the combined solution, I would
like to turn the call over to Fred Luddy, Peregrine's Chief Technology Officer.
Fred ...
[FRED LUDDY]
Thank you Steve-
As an e-Commerce and e-Business solution set, the combination of Peregrine and
Harbinger is very compelling.
Further, the combination is very complimentary with no overlap in product
functionality
As far as a shared vision on e-Commerce over the Internet using appropriate
standards such as secure HTTP and XML, Peregrine and Harbinger have a complete
overlap.
Peregrine's employee Self-Service suite and XML B2B capabilities along with
Harbinger's e-Commerce interfaces, Catalog and Content management, and the
Harbinger Network deliver end-to-end, full-service e-Commerce.
Peregrine brings to the table a world-class e-Procurement buy side application
called Get.It along with complete lifecycle management for the asset. Get.It is
complimented by Peregrine's B2B server capabilities already interfaced to the
likes of Dell, OfficeDepot, Software Spectrum, Comark, and Supplyaccess.
Harbinger brings a suite of sell-side applications and probably the most
technically advanced market places on the planet.
In addition Harbinger's complete view of e-Commerce, with a knowledge of All the
transactions involved, ALL the parties involved in a typical transaction, and
the ability to interact with each of those parties in their own dialect
demonstrates an approach to e-Procurement that is a recipe for success.
Peregrine contrasted the Harbinger approach to other e-Commerce companies that
have an extremely limited transaction set using a single dialect over
proprietary e-Commerce dial tones that envision only a limited number of parties
participating in the transaction... and no, I'm not talking about amazon or
eBay.
Harbinger's XML and HTTP based transaction capabilities along with their catalog
rationalization tools and expertise and the ability to perform both XML and EDI
based transactions with thousands of buyers, suppliers, financial institutions,
ports, shippers, and customs agencies in multiple e-Commerce dialects make
Harbinger the premier choice for rounding out the Peregrine offering.
Integration of the two companies' suites will provide an end-to-end e-Commerce
solution with capabilities heretofore unseen.
From a pure R & D perspective, we are gaining a world-class development staff of
over 100 developers complemented by 50 QA and documentation personnel.
Finally, the integration of the two technology sets will be the easiest
integration Peregrine has ever performed. Both Peregrine's and Harbinger's
software are built to interact on a transactional basis over the Internet. At
first the Harbinger integration will be like any other trading partner or market
place. Shortly after the first integrations are complete we will continue to add
more and more B2B capabilities leveraging our common vision of internet based
e-Commerce and e-Business.
On the EDI company issue...
What we found in our investigative stages was that HRBC is in the final stages
of a transition from an EDI tools vendor to a modern e-Commerce solution
provider. They started the transition some 18 months ago and have been quite
successful in driving their growth initiatives. The major area of focus that
Peregrine invested in has been growing in the triple digits while the EDI
business has remained the profitable foundation for the building period.
We believe that it's a lot easier to make a transition from a tools company to a
solution provider than to build from within.
Millions of transactions per day are already running over the Harbinger network.
[STEVE GARDNER]
Thanks Fred, and now, I would like to introduce the President and CEO of
Harbinger Corporation, Jim Travers. Jim...
[JIM TRAVERS]
Good morning to everyone.
I have a few comments I would like to make about the strategic partnership that
we're forming here and why we think it is a superb fit.
Before I get into the elements of that, I would like to make an overall
summary comment which I think would be directed most to Peregrine
shareholders and investors there who may not know Harbinger as well as,
obviously, those who track our company.
A couple things I would like to play off of that Steve mentioned. First of all,
there's a lot of myths in this industry right now going around and clearly we're
not arguing that EDI is not in a form of a transition and that Harbinger,
historically, has been very much an EDI delivery type of company. But, at the
end of the day, gentlemen and ladies, EDI is another way of doing electronic
commerce standards, just like XML is a very active emerging standard, the world
of X12 and Edifax - EDI world are the same. At the end of the day what matters
to customers of all sizes is how do they connect to their trading partners, how
do they do that electronically in real time and over IP based protocols.
We have over 40,000 revenue generating customers today, over 54% of those are
now IP connected to our transaction server, Harbiner.net, so we are leading in
our view the whole business to business area over to IP based connectivity and
whether that standard is an EDI transaction set or XML or OBI, whatever emerges,
we had planned and the new company will plan to support whatever those standards
are. So, from our view, we have more connected trading partners doing electronic
commerce today than anybody in the business, including CommerceOne and Ariba.
Ask them questions of how many connected trading partners that they have, I
think that is the material aspect I'd like to talk about.
In my comments of why I think this is a wonderful fit, first let me state that
the Harbinger team is very excited about the opportunity to combine forces with
Peregrine to both enhance and extend our leadership position in the B2B market.
I think that the first comment I would make is that from our view looking at the
way business to business was emerging, is that this business is going to be an
incredibly large opportunity for companies to compete and win major parts of
market share. With this combination from our view is positioning our company
together as being a major market share accumulator over the next 2 to 3 years to
have a large share of that market that Forrester and the other research
companies are forecasting to be in the trillions of dollars going forward. So,
when we looked at this strategically, the question that we had to ask was, if
that's going to be the case, then how does Harbinger position itself to be a
major accumulator of that market share and we believe combining forces with
Peregrine gives us the best opportunity to create shareholder value and have the
mutual company succeed in that regard.
First of all, I would like to also state that business to business
implementations are not easy. Doing business to business electronically is a
very complex endeavor. There are different standards, there's different
transaction sets, there is heterogeneous application environments. When it
comes down to it, putting an effective business to business e-commerce
solution in place is not easy and, in fact, you'll be hearing a lot from our
combined companies talking about that we make e-business work and I want to
underline the fact that there is work to be done to make these things happen.
I think both companies' history and track record will show the market that we
have done it before, we have done it successfully and we are going to do it
even better in the future. I think combining with Peregrine's strength and
the enterprise with their asset management software capability in Get.It,
extending their ability to integrate into e-procurement and workflow is an
outstanding way of combining the assets that Harbinger has developed with our
core competency of extending the ability for companies of all sizes to trade
electronically with their trading partners and we believe that leveraging our
software and our connectivity through Harbiner.net, our e-commerce center,
will be a great opportunity to have an end to end solution that Steve
referred to and we believe that further that as companies look to integrate
these solutions going forward that there will be power in offering an
integrated solution to the market as opposed to point solutions and
essentially trying to wire together 4 or 5 different solutions from different
companies.
So, in the end, coupling Peregrine's strengths with ours we believe will give us
the best chance to offer that solution and offer it from a single company and
doing it globally and doing it through 2500 experienced employees that Steve
referred to.
So, at the end of day, the company that's going to win in this business is going
to be one that is going to have the scale, the solutions and the people that can
offer companies globally the ability to successfully implement their solution
and do it in real time and do it quickly and that's what this opportunity we
both have to implement is all about and in the end we'd like to think about it
in context of a 1 + 1 = 4 in the equation and that's why we're so excited about
coming together, putting our mutual strategies together and getting to market
very quickly.
Let me turn it back to you Steve.
[STEVE GARDNER]
Thanks Jim, and now to go over the financial summary of the transaction, I would
like to introduce Peregrine Systems' Chief Financial Officer, David Farley.
David ...
[DAVID FARLEY]
Thanks Steve.
My comments today will be very brief, but I will be happy to try to answer any
financial questions you may have on this transaction.
First of all, this is a stock for stock deal. We will issue 0.75 shares of
Peregrine stock for each outstanding share, option and warrant of Harbinger.
Based upon our analysis of the Harbinger capital structure, Peregrine will issue
approximately 36 million shares to close this transaction.
There are no collars associated with the deal, it is a very simple fixed
exchange ratio
Based upon Peregrine's closing stock price today of 58, the transaction has a
current value of approximately 2.1 billion dollars.
We expect to use the purchase method to account for the combination.
We anticipate the transaction will close in either the June or September
quarter.
We expect this deal to be Earnings Per Share neutral as far as Fiscal Year 2001
Peregrine estimates are concerned.
That's it for me.
[STEVE GARDNER]
Thanks David, and now we will open the call to questions. The call will end at
6:00 AM pacific, 9:00 am Eastern, so we will ask participants to limit
themselves to a single question at this time and we will do the best we can to
answer as many as possible in the time available.
* * * * * *
This conference call script is being filed pursuant to rule 425 under the
securities act of 1933 and deemed filed pursuant to rule 14a-12 under the
exchange act of 1934. This press release does not constitute an offer of sale of
securities. Shareholders of peregrine and other investors are urged to read the
proxy statement-prospectus which will be included in the registration statement
on form S-4 to be filed by Peregrine in connection with the merger because it
will contain important information. After this document is filed, it will be
available free of charge on the sec website at www.sec.gov and from Peregrine by
directing a request through the investors relations portion of Peregrine's
website at http://www.peregrine.com or by mail to Peregrine Systems, Inc., 12670
High
Bluff Drive, San Diego, Ca 92130, Attention: Investor Relations, Telephone:
(858) 481-5000.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
Peregrine plans to file a registration statement on form S-4 in connection with
the merger, and Harbinger and Peregrine expect to mail a joint proxy
statement/prospectus to stockholders of Harbinger and Peregrine containing
information about the merger. Investors and security holders are urged to read
the registration statement and the joint proxy statement/prospectus carefully
when they are available. The registration statement and the joint proxy
statement/prospectus will contain important information about Harbinger,
Peregrine, the merger, the persons soliciting proxies relating to the merger,
their interests in the merger, and related matters. Investors and security
holders will be able to obtain free copies of these documents through the
website maintained by the U.S. Securities and Exchange Commission at
http://www.sec.gov. Free copies of the joint proxy statement/prospectus and
these other documents may also be obtained from Peregrine by directing a request
through the investors relations portion of Peregrine's website at
http://www.peregrine.com or by mail to Peregrine Systems, Inc., 12670 High Bluff
Drive, San Diego, CA 92130, Attention: Investor Relations, telephone: (858)
481-5000.
In addition to the registration statement and the joint proxy
statement/prospectus, Peregrine and Harbinger file annual, quarterly and special
reports, proxy statements and other information with the securities and exchange
commission ("SEC"). You may read and copy any reports, statements or other
information filed by Peregrine or Harbinger at the SEC Public Reference Rooms at
450 Fifth Street, N.W., Washington, D.C. 20549 or at any of the SEC's other
public reference rooms in New York, Chicago, and Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms.
Peregrine's and Harbinger's filings with the commission are also available to
the public from commercial document-retrieval services and at the web site
maintained by the SEC at http://www.SEC.gov.
INFORMATION CONCERNING PARTICIPANTS
Harbinger, its directors, executive officers and certain other members of
management and employees may be soliciting proxies form Harbinger stockholders
in favor of the issuance of Harbinger common stock in the merger. Information
concerning the participants in the solicitation is set forth in a current report
on Form 8-K filed by Harbinger on April 5, 2000.
INFORMATION CONCERNING PERSONS INVOLVED IN THE SOLICITATION
In connection with the proposed acquisition, Peregrine will solicit proxies from
its stockholders to approve the issuance of shares of its Common Stock in
connection with the acquisition. Peregrine is required to obtain stockholder
approval of the issuance in order to comply with the rules of The Nasdaq Stock
Market.
Officers and directors of Peregrine may participate in the solicitation. The
members of Peregrine's Board of Directors are John. J. Moores, Stephen P.
Gardner, David A. Farley, Christopher A. Cole, Richard A. Hosley II, Charles E.
Noell III, Norris van den Berg, and Thomas G. Watrous, Sr. Mr. Moores is the
Chairman of our Board of Directors. Mr. Gardner also serves as our President and
Chief Executive Officer, and Mr. Farley also serves as our Senior Vice
President, Finance and Administration, and Chief Financial Officer. Other
officers of Peregrine who may participate in the solicitation of proxies are
Matthew C. Gless, our Vice President, Finance, and Chief Accounting Officer;
William G. Holsten, our Senior Vice President, Worldwide Professional Services;
Frederic B. Luddy, our Vice President, Research and Development; Douglas S.
Powanda, our Executive Vice President, Worldwide Operations; Steven S. Spitzer,
our Vice President, Channel Sales; Richard T. Nelson, our Vice President,
Corporate Development; and Eric Deller, our Vice President and General Counsel.
More information about our officers and directors is contained in the proxy
statement for our 1999 Annual Meeting of Stockholders and our Annual Report on
Form 10-K for the year ended December 31, 1998. Both of these documents have
been filed with the SEC and are available at the SEC's website, WWW.SEC.GOV, at
the SEC's office and by contacting our investor relations department.
BENEFITS OF MERGER TO HARBINGER OFFICERS
Certain officers and directors of Harbinger will receive accelerated
vesting of their stock options in connection with the merger. A description
of these benefits is contained in Harbinger's proxy statement for its 2000
Annual Meeting of Shareholders under the caption "Agreements with Employees."
Harbinger's proxy statement was filed with the SEC and is available at the
SEC's website, www.SEC.gov, at the SEC's offices, or by directing a request
through the Investors Relations portion of Harbinger's website at
HTTP://WWW.HARBINGER.COM or by mail to Harbinger Communications, 1277 Lenox
Park Boulevard, Atlanta, GA 30319, Attention: InvestorRelations, telephone:
(404) 467-3000.