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Filed by: Towne Services, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Towne Services, Inc.
Commission File No. 000-24695
FOR IMMEDIATE RELEASE
Contact: G. Lynn Boggs
Chairman and Chief Executive Officer
(678) 475-5200
TOWNE SERVICES, INC. ANNOUNCES PROPOSED MERGER
WITH PRIVATE BUSINESS, INC.
SUWANEE, Ga. (March 13, 2001) -- Towne Services, Inc. (Nasdaq/NM: TWNE) today
announced the execution of a letter of intent to engage in a strategic merger
with Private Business, Inc., (Nasdaq:PBIZ). Based in Brentwood, Tennessee,
Private Business is a leading provider of technology-driven solutions that help
banks manage accounts receivable financing for small businesses. The company's
software-based solution, Business Manager(R), automates the management of
accounts receivable financing for a network of over 1,100 community banks
throughout the nation.
The letter of intent provides that Towne's shareholders would own
approximately 36% of the surviving corporation's capital stock following
consummation of the merger. Final terms of the proposed transaction will be
disclosed upon the signing of a definitive agreement, which is expected by March
31, 2001. The merger is subject to customary closing conditions, including
approval by the shareholders of both companies, and is expected to close in the
first half of 2001.
Commenting on the transaction, Lynn Boggs, chairman and chief executive
officer of Towne Services, commented, "We are very excited to have the
opportunity to join forces with Private Business in the merger of the two
leading companies in the electronic transaction processing industry. We believe
there are a number of significant financial and operating synergies that will be
immediately realized with the combination of two companies who bring different,
but very complementary strengths to the merger. Private Business has an
outstanding sales culture with an enviable record of profitable sales to a
nationwide network of community banks and thousands of small businesses across
the United States. We believe that with our proprietary electronic gateway that
links banks, businesses and consumers, we will now have a greater opportunity to
enhance our market coverage by leveraging the strength of their sales program
with our proven technology. Additionally, with over $12.4 million in cash and
cash equivalents as of December 31, 2000, we bring additional financial strength
to the merger and as such, believe that the combined entity will be well
positioned for continued growth.
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Towne Services Announces Proposed Merger with Private Business, Inc.
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March 13, 2001
"Clearly, the merger will create a company with broader capabilities
and more resources and we are very enthusiastic about the expanded market
presence after the consummation of this transaction. With our joint customer
base of over 1,600 banks under contract and over 8,000 merchants, we will be the
undisputed leader in providing e-commerce business and management tools to banks
and small businesses. More importantly, we believe the substantial economies of
the merger will create an efficient and more profitable organization and enhance
shareholder value," concluded Boggs.
Towne Services, Inc., based in the metropolitan Atlanta area, is a
leading provider of services and products that process sales and payment
information and related financing transactions for small and mid-sized retail
and commercial businesses and banks in the United States. The Company delivers
these services and products on-line by linking its business and bank customers
to its processing systems using the Internet and telecommunications lines.
Towne's systems also act as a hub, or electronic gateway, through which
customers can access a variety of e-commerce business and management tools
provided by Towne and its strategic alliances.
This release contains forward-looking statements that involve risks and
uncertainties, including those relating to Towne's operations, revenue, economic
performance, business prospects, management and financial condition. Actual
results may differ materially from those expressed or implied by such
forward-looking statements as a result of the following factors, among others:
whether Towne can grow its customer base as planned; competitive market
pressures in the financial technology sector; the possible negative effects of
lawsuits filed against Towne; whether Towne will continue to satisfy stock
market listing standards; market acceptance of new products and services; and
other factors discussed under "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Disclosure Regarding Forward-Looking
Statements" in Towne's filings with the Securities and Exchange Commission
("SEC"). In addition, there are potential risks and uncertainties relating to
the proposed merger with Private Business, including, but not limited to, the
results of the respective parties due diligence investigations, the ability of
the parties to reach a mutually acceptable merger agreement and other factors.
If an agreement is reached, the parties will be required to file documentation
with the SEC concerning the transaction.
WE URGE INVESTORS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER
RELEVANT DOCUMENTS TO BE FILED with the SEC, WHEN THEY BECOME AVAILABLE, BECAUSE
THEY CONTAIN OR WILL CONTAIN
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Towne Services Announces Proposed Merger with Private Business, Inc.
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March 13, 2001
IMPORTANT INFORMATION. INVESTORS WILL BE ABLE TO OBTAIN THESE DOCUMENTS FREE OF
CHARGE AT THE SEC'S WEBSITE, WWW.SEC.GOV. PLEASE READ THE PROXY
STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING A DECISION CONCERNING THE MERGER.
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