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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE TO
(RULE 14d-100)
Tender Offer Statement Pursuant to Section 14(d)(1) or 13(e)(1) of
the Securities Exchange Act of 1934
Interact Commerce Corp.
(Name of Subject Company)
Isaiah Acquisition Corp.
a wholly owned subsidiary of
The Sage Group plc
(Offerors)
Common Stock, Par Value, $0.001 per Share
(Title of Class of Securities)
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45839Y107
(Cusip Number of Class of Securities)
Paul Walker
The Sage Group plc
Sage House
Benton Park Road
Newcastle Upon Tyne
England NE7 7LZ
Telephone: (191) 255-3000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Filing Persons)
Copies to:
Kenton J. King, Esq.
Marc R. Packer, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue
Palo Alto, CA 94301
Telephone: (650) 470-4500
[X] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to
which the statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer. [ ]
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NOT FOR RELEASE BEFORE 7:00 AM (LONDON TIME)
28TH MARCH 2001
THE SAGE GROUP PLC
RECOMMENDED TENDER OFFER FOR INTERACT COMMERCE CORPORATION ("INTERACT")
There will be a conference call for equity analysts and investors today
at 9.30am. Details can be obtained from Financial Dynamics.
o Recommended tender offer to acquire Interact, listed on NASDAQ, for
$263 million ((pound)183 million). The tender offer will be financed
using a loan facility. Interact had net debt at 31 December 2000 of $19
million ((pound)13 million).
o The tender offer is $12.00 in cash per share, a premium of 51% to the
closing market price on 27 March 2001.
o Interact is a leading player in the US market for CRM (Customer
Relationship Management) software targeted at small to medium-sized
enterprises (SMEs). The acquisition of Interact provides Sage with a
strong position in this strategically important market.
o Interact has two products: ACT! targeted at small businesses; and
SalesLogix targeted at medium-sized businesses.
o Interact distributes its products through an established network of
value added resellers specialising in CRM software.
o The acquisition of Interact provides Sage with the opportunity to sell
Interact's range of market-leading CRM products into Sage's customer
base of more than 2.5 million customers.
Commenting on today's announcement, Paul Walker, Chief Executive, said:
" The acquisition of Interact presents Sage with significant
opportunities. Interact is a strong business in its own right and
gives us a leading position in the strategically important CRM
market. We are confident that Sage's global presence and channel
strength will open up additional opportunities for Interact's
products in both new and existing markets. This acquisition
represents a significant opportunity to sell additional products and
services to Sage's 2.5 million customers worldwide."
Enquiries:
THE SAGE GROUP PLC 0191 255 3000
Paul Walker, Chief Executive
Paul Harrison, Finance Director
Phil Branston, Investor Relations
Web-site address: http://www.sage.com
FINANCIAL DYNAMICS 020 7831 3113
Giles Sanderson/Harriet Keen
INTRODUCTION
The Sage Group plc, the world's leading supplier of business management
solutions and services to SMEs, today announced that it is to launch a
tender offer for Interact, a leading CRM company (NASDAQ: IACT) for $12 a
share in an all cash deal valuing the company's equity at $263 million
((pound)183 million). Interact has its headquarters in Scottsdale, Arizona.
Interact had net debt at 31 December 2000 of $19 million ((pound)13
million). The offer has been recommended by the Interact board. The
transaction is being financed using a loan facility and is expected to be
earnings enhancing in Sage's first full financial year following completion
of the acquisition.
BACKGROUND
Over the past few years it has become clear that SMEs are looking for a
comprehensive range of highly integrated software applications to help them
manage their core business processes. Sage is already responding to this
trend by offering SMEs an ever broader range of business management
software, support services and e-business solutions, in addition to its
traditional accounting and payroll products.
The acquisition of Interact will further enhance Sage's ability to meet the
growing needs of the SME community worldwide. CRM software is one of the
fastest growing sectors of the business software market and the acquisition
of Interact will enable Sage to offer SMEs a complete range of solutions to
manage and grow their businesses.
CRM SOFTWARE
CRM software enables businesses to capture and analyse relevant customer
data at all points of interaction between the company and its customers. It
helps businesses generate increased revenues through more effective sales
and marketing, improve customer retention by enhancing customer service;
and reduce costs by making internal processes more efficient.
Sage's accounting systems already store and process customer data, such as
contact details and records of past transactions. By integrating Sage's
accounting systems with Interact's CRM software, SMEs will be able to take
a unified view of their customers and thereby further increase revenues and
improve business efficiency. Sage's acquisition of Interact will offer a
level of integration between accounting and CRM software systems that
standalone competitors will find difficult to match.
INTERACT
Interact is a leading supplier of CRM software with two product ranges,
targeting both small businesses and mid-market customers. At the entry
level, ACT! is a leading contact management and salesforce automation
package, whilst SalesLogix provides comprehensive CRM functionality,
including sales, marketing, e-commerce and support, to mid-market customers
who require a more sophisticated CRM software solution.
Interact's CEO and founder, Pat Sullivan, has a wealth of CRM experience
and is a highly respected figure within the industry. Over the past few
years, Pat Sullivan has built up a professional management team at Interact
and this team will remain in place post-acquisition to effect Sage's
strategic plans for the future development of Interact's business.
Since its inception in 1993, Interact has built up a significant presence
in the SME CRM software market. To date, ACT! has sold over 3.2 million
individual licences, whilst SalesLogix has in excess of 3,500 corporate
customers. CRM software is one of the fastest growing sectors of the
business software market and Interact's scale and product range means it is
well placed to take advantage of this significant growth.
In the year to 31 December 2000, Interact made an operating profit (before
interest, amortisation and the $30.8 million cost of its investment in
Interact.com), of $6.5 million, on sales of $107.7million. Interact has now
completely exited from the Interact.com venture, and has refocused on
selling its core products through traditional channels. Interact had net
assets of $20.4 million at the year end.
Paul Walker, Sage's Chief Executive, commented: "The acquisition of
Interact presents Sage with a number of significant opportunities. Interact
is a strong business in its own right and gives us a leading position in
the CRM market. We are confident that Sage's global presence and channel
strength will open up additional opportunities for Interact's products in
both new and existing markets.
This acquisition represents a significant opportunity to sell additional
products and services to Sage's 2.5 million customers worldwide. Whilst
penetration of CRM software amongst Sage customers is currently estimated
at less than 10%, our research suggests that demand is already high and is
likely to grow significantly over the next few years".
Exchange rate:(pound)1=$1.434.
TIMETABLE
o 28 March 2001: offer announced
o By 4 April: tender offer document circulated to Interact shareholders
o Interact shareholders have 20 working days to tender their shares
o By 3 May 2001: first closing date for tender offer
INTERIM RESULTS ANNOUNCEMENT DATE
As a result of this acquisition we will now be announcing our interim
results on the 9th May.
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OTHER INFORMATION
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell shares of Interact Commerce Corporation. At the time the
offer is commenced, The Sage Group plc and Isaiah Acquisition Corp. will
file a tender offer statement with the U.S. Securities and Exchange
Commission and Interact Commerce Corporation will file a
solicitation/recommendation statement with respect to the offer. The tender
offer statement (including an offer to purchase, a related letter of
transmittal and other offer documents) and the solicitation/recommendation
statement will contain important information, which should be read
carefully before any decision is made with respect to the offer. The offer
to purchase, the related letter of transmittal and certain other offer
documents, as well as the solicitation/recommendation statement, will be
made available to all shareholders of Interact at no expense to them. The
tender offer statement (including the offer to purchase, the related letter
of transmittal and all other offer documents filed with the Commission) and
the solicitation/recommendation statement will also be available for free
at the Commission's website at www.sec.gov.