EXHIBIT 99.1
NEWS RELEASE for February 22, 2005 at 7:30 am EST
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CONTACTS FOR INCENTRA SOLUTIONS:
Allen & Caron Inc. Incentra Solutions, Inc.
Jill Bertotti (investors) Thomas P. Sweeney, III
jill@allencaron.com Chairman and CEO
------------------- (303) 449-8279
Len Hall (financial media)
len@allencaron.com
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(949) 474-4300
INCENTRA SOLUTIONS COMPLETES ACQUISITION OF STAR SOLUTIONS
ALMOST DOUBLES ANNUALIZED REVENUES, PROVIDES PLATFORM FOR SALE OF HIGHER
MARGIN STORAGE SOLUTIONS AND SERVICES
BOULDER, CO, FEBRUARY 22, 2005 - Incentra Solutions, Inc. (OTCBB: ICEN)
announced today that it has acquired privately-held STAR Solutions, Inc.
(www.star-solutions.com) of San Diego in a transaction that almost doubles the
Company's annualized revenue and is expected to be immediately accretive.
Chairman and CEO, Thomas P. Sweeney, said that the acquisition of STAR is a key
first step in implementing the Company's strategy to substantially grow revenues
in its target markets by acquiring established direct sales and service
organizations. STAR is a leading systems integrator that provides Information
Technology (IT) products, professional services and outsourcing solutions to
enterprise markets in the western United States.
The purchase price for STAR consisted of $1.5 million in cash, approximately
12.6 million shares of unregistered Incentra common stock, and an unsecured
promissory note for $2.5 million. Incentra acquired all of the outstanding
shares of capital stock of STAR. At the time of the acquisition, STAR had $1.6
million in cash and no outstanding debt. Financing for the acquisition was
provided by Wells Fargo Bank, N.A. through a new $5 million commercial loan
facility. The facility paid all costs of the acquisition and is expected to
provide sufficient capacity to finance the growth of the business and subsequent
acquisitions.
The acquisition of STAR increases Incentra's direct sales resources in the
enterprise market, and will provide the Company direct access to customers for
its unique monitoring and management services. The Company intends to introduce
its GridWorks services this year to STAR's customers and will introduce over
time first call support services for all products sold by STAR. "We expect to
see increasing gross margins throughout the year, as well as increases in our
monthly recurring revenues as a direct result of this acquisition" Sweeney said.
STAR provides IT consulting, systems, storage and outsourcing services to a
large base of customers in financial services, hospitality, retail, security and
manufacturing verticals. STAR revenues in 2004 amounted to approximately $17
million which generated net income.
"STAR has an excellent management team, top flight personnel and an exceptional
record of providing high quality IT solutions to its growing customer base,"
Sweeney said. "The
acquisition of STAR will significantly expand our ability to deliver complete
storage solutions, including hardware, software and services, to a larger number
of mid-sized enterprises."
STAR will operate as a wholly-owned subsidiary of Incentra Solutions and be
managed by STAR President Elaine A. Bellock. Ms. Bellock has been with STAR for
the past five years and has been President since early 2003, when she assumed
the management of all day-to-day operations from the founder and principal
owner. STAR's 45 employees will continue to be based in San Diego, the San
Francisco Bay Area, Los Angeles, Las Vegas, Phoenix and Delray Beach, FL.
"It had become increasingly clear to us over the last few years," Bellock said,
"that customers continue to experience changes in their IT environments, and
those changes present an increased need for services to augment their existing
staff. Partnering with Incentra Solutions enables STAR to now offer a broader
set of services to our customers, which will create additional competitive
advantages."
Inveraray Partners headquartered in the San Francisco Bay Area advised Incentra
Solutions on the acquisition. "Mike Orbach and the team at Inveraray did a
tremendous job from start to finish," Sweeney said.
ABOUT STAR SOLUTIONS, INC.
Systems Technology and Resources (STAR Solutions) is committed to providing
clients with affordable and flexible Information Technology solutions to
overcome the challenges found in today's complex business environments.
Established in 1997 with personnel in San Diego, Los Angeles, Las Vegas, Fort
Lauderdale, San Francisco Bay Area and Phoenix, STAR Solutions expanded from a
traditional Hardware/Software Solution Provider to a full-service Technology
Consulting Company supporting clients nationwide. As Professional Development
Specialists, STAR Solutions specializes in designing, building, implementing and
knowledge transfer of technology solutions across the complete infrastructure.
ABOUT INCENTRA SOLUTIONS, INC.
Incentra Solutions, Inc. (OTCBB:ICEN) (WWW.INCENTRASOLUTIONS.COM), is a provider
of storage management solutions to broadcasters, enterprises and managed service
providers worldwide. The Company operates a Broadcast & Media Division, Front
Porch Digital (WWW.FPDIGITAL.COM), that provides digital archive management and
transcoding solutions and a wholly-owned subsidiary, ManagedStorage
International (MSI, WWW.MSISERVICE.COM), that provides storage management
software, hardware and outsourcing services facilitated by its GridWorks online
storage resource management product.
INCENTRA SOLUTIONS FORWARD LOOKING STATEMENTS
Certain information discussed in this press release may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and the federal securities laws. Although the
Company believes that the expectations reflected in such forward-looking
statements are based upon reasonable assumptions at the time made, it can give
no assurance that its expectations will be achieved. Readers are cautioned not
to place undue reliance on these forward-looking statements. Forward-looking
statements are inherently subject to unpredictable and unanticipated risks,
trends and uncertainties such as the Company's inability to accurately forecast
its operating results; the Company's potential inability to achieve
profitability or generate positive cash flow; the availability of financing; and
other risks associated with the Company's business. For further information on
factors which could
impact the Company and the statements contained herein, reference should be made
to the Company's filings with the Securities and Exchange Commission, including
Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current
Reports on Form 8-K. The Company assumes no obligation to update or supplement
forward-looking statements that become untrue because of subsequent events.
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