Filed by MRO Software, Inc. Pursuant to Rule 425
Under the Securities Act of 1933
and Deemed Filed Pursuant to Rule 14d-2(b)
under Securities Exchange Act of 1934
Subject Company: Datastream Systems, Inc.
Commission File No.: 000-25590
Date: December 20, 2001
[MRO SOFTWARE LOGO]
FOR IMMEDIATE RELEASE
CONTACTS:
Chip Drapeau Peter Rice
(781) 280-6800 (781) 280-6550
chip.drapeau@mro.com peter.rice@mro.com
MRO SOFTWARE OFFERS TO PURCHASE DATASTREAM SYSTEMS
COMBINATION ACCRETIVE; PRIOR OFFER REJECTED BY DATASTREAM BOARD OF DIRECTORS
BEDFORD, MASS., Dec. 20, 2001 - MRO Software, Inc. (Nasdaq: MROI), the leading
provider of e-Business solutions for asset-intensive companies, today announced
that it has made an offer to purchase Datastream Systems, Inc. (Nasdaq: DSTM), a
provider of applications, tools and services for asset lifecycle management
based in Greenville, South Carolina.
MRO Software has sent a letter to Datastream's Chairman and CEO offering to
purchase Datastream for a price of $6.00 per share, consisting of $1.00 in cash
and $5.00 in the form of MRO Software Common Stock, representing a premium of
45% over Datastream's average closing price over the past 15 trading days ($4.15
per share). A copy of MRO Software's offer is attached to this press release.
In the letter, MRO Software indicated that it was prepared to commence
discussions immediately and that it believed a transaction could be consummated
within eight weeks following execution of definitive documentation. To effect
the transaction, MRO Software would commence an exchange offer for all of
Datastream's outstanding common stock followed by a merger at the same per share
price.
"The logic behind this combination is simple and compelling," said Chip Drapeau,
president and CEO, MRO Software. "Done correctly, this transaction should be
accretive from both a revenue and earnings perspective, and there is significant
potential for business and operational synergies. This combination would allow
both businesses to focus on a broader market opportunity, allowing
diversification of revenue streams and accelerated growth. The transaction is
timely, based on the pronounced shift to pure Web-based applications, and the
market's desire for a clear choice for strategic MRO and industrial supplier
enablement. It is perplexing to us that Datastream's Board has refused to engage
in discussions with us regarding the benefits of the proposed combination."
ABOUT MRO SOFTWARE, INC.
MRO Software is the leading provider of e-Business solutions for asset-intensive
companies. As a worldwide leader in enterprise asset maintenance, MRO Software
has the technology and in-depth understanding of issues confronting
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capital asset-intensive industries to connect all participants in the industrial
value chain. The Company's solutions help make e-Business easy, practical and
affordable.
The Company's Strategic MRO, Online Commerce Services and Enterprise Catalog
Management solutions allow customers to streamline their internal processes and
compete more efficiently in an increasingly collaborative and electronic market.
MAXIMO(R), the Company's flagship Strategic MRO solution, is creating value in
more than 8,000 organizations located in 103 countries by extending asset life,
decreasing operating costs and enabling efficient supplier collaboration.
MRO Software (Nasdaq: MROI) is a global company based in Bedford, Mass., with
more than 1,000 employees. The Company markets its products through a direct
sales force in combination with a network of international distributors. MRO
Software has sales offices throughout North America, Europe, Asia/Pacific and
Latin America. Additional information on MRO Software can be found at
http://www.mro.com.
MAXIMO(R) is a registered trademark, and MRO SoftwareTM is a trademark, of MRO
Software, Inc.
FORWARD LOOKING STATEMENTS
This press release and its attachment contain forward-looking statements (within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended). The Company's
actual results may differ materially from those suggested by the forward-looking
statements and the Company may not realize the benefits intended from the
proposed acquisition, for various reasons, including without limitation the
failure of Datastream's business, products or technologies to meet the Company's
expectations, difficulties in retaining Datastream personnel necessary for the
combination to succeed, difficulties integrating the products or technologies of
the two companies and providing migration paths for customers, difficulties in
effectively distributing the two companies' products through the combined sales
force and channels, difficulties in retaining Datastream's existing customers
and revenue streams, difficulties in achieving market or operational synergies,
liabilities of Datastream that that are neither currently known nor disclosed
before the acquisition is consummated, the termination of contracts for supply
by key vendors of Datastream (including suppliers of technology) as a result of
the transaction, and those reasons discussed in the section "Factors Affecting
Future Performance" in our most recent Quarterly Report on Form 10-Q as filed
with the Securities and Exchange Commission.
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SHARES OF DATASTREAM SYSTEMS, INC. DATASTREAM'S STOCKHOLDERS ARE URGED
TO READ THE RELEVANT EXCHANGE OFFER DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION THAT STOCKHOLDERS SHOULD CONSIDER BEFORE
MAKING ANY DECISION REGARDING TENDERING THEIR SHARES. AT THE TIME THE OFFER, IF
ANY, IS COMMENCED, MRO SOFTWARE, INC. WILL FILE EXCHANGE OFFER MATERIALS WITH
THE U.S. SECURITIES AND EXCHANGE COMMISSION AND DATASTREAM WILL FILE A
RECOMMENDATION STATEMENT WITH RESPECT TO THE OFFER. THE EXCHANGE OFFER MATERIALS
(INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER
DOCUMENTS) AND THE 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 RECOMMENDATION STATEMENT, WILL BE MADE
AVAILABLE TO ALL STOCKHOLDERS OF DATASTREAM AT NO EXPENSE TO THEM. THE EXCHANGE
OFFER MATERIALS (INCLUDING THE OFFER TO PURCHASE, THE RELATED LETTER OF
TRANSMITTAL AND ALL OTHER DOCUMENTS FILED WITH THE COMMISSION) AND THE
RECOMMENDATION STATEMENT WILL ALSO BE AVAILABLE FOR FREE AT THE COMMISSION'S
WEBSITE AT WWW.SEC.GOV.
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ATTACHMENT
December 20, 2001
Mr. Larry Blackwell
Chairman of the Board, Chief Executive Officer and President
Datastream Systems, Inc.
50 Datastream Plaza
Greenville, SC 29605
Dear Larry:
On behalf of MRO Software, Inc. ("MRO"), I am pleased to submit the enclosed
offer to acquire Datastream Systems, Inc. ("Datastream"). As you know, we at MRO
were extremely disappointed when you terminated discussions with us earlier this
month regarding a potential transaction between us. We continue to believe that
the combination of our two companies offers compelling strategic benefits for
our businesses as well as undeniable value and liquidity for your shareholders.
In this regard, you should consider that:
(i) The revenue and operating pre-tax synergies to be derived from the
combination of our businesses are substantial, which we conservatively estimate
at between $7.5 million and $15 million on an annual basis.
(ii) The transaction should be accretive on a revenue per share basis, providing
the potential for pro forma price appreciation because Datastream's operating
components of the combined company's results should be valued at the
significantly higher forward revenue multiple which MRO enjoys.
(iii) Our stock enjoys a greater than 8 times higher average daily trading
volume than Datastream's common stock over the past 15 days.
(iv) The proposed price represents a 45% premium over the past 15-day average
closing price of your stock.
(v) The combined company would have a strong and expanded platform from which to
address new and existing markets, allowing diversification of revenue streams
and accelerated growth.
(vi) We would be able to create multiple market synergies, such as upsell
opportunities into each company's customer base, and a unified e-Commerce
"pull".
Based on currently available information, MRO proposes to acquire all
outstanding Datastream common stock at a fixed price of $6 per share, consisting
of $5 in our stock and $1 in cash. We would expect that the transaction would be
treated as a tax-free reorganization in most circumstances, thereby providing
tax-deferred treatment for the stock portion of the consideration. We would
consider increasing our offer if, in the course of our discussions, you
demonstrate that there is increased value to MRO in the proposed transaction.
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As part of the transaction, we propose to execute employment agreements with
appropriate key employees, and to appoint Larry Blackwell to MRO's Board of
Directors.
To effect the transaction, we would commence an exchange offer for all of
Datastream's outstanding common stock followed by a merger at the same per share
price. We expect that the transaction could be consummated within eight weeks of
the execution of definitive transaction documentation. Because the cash portion
of the transaction would be financed entirely through MRO's existing cash
reserves, our offer is not subject to any financing contingency. We are prepared
to begin discussions with you immediately.
As is customary, our proposal is subject to completion of a brief, confirmatory
due diligence review, the redemption of all rights issuable under your recently
enacted rights plan, the negotiation of definitive documentation and compliance
with applicable regulations.
The Board of MRO has unanimously approved this proposal and authorized us to
proceed immediately. Our intent is to promptly conclude a transaction that
should be enthusiastically supported by you, your Board of Directors, and
Datastream's shareholders. Should you decline to enter into negotiations with
us, we reserve the right to take our offer directly to your shareholders.
Sincerely,
Robert L. Daniels
Chairman of the Board
This document is being filed pursuant to Rule 425 under the
Securities Act of 1933 and is deemed filed pursuant to Rule 14d-2(b) under the
Securities Exchange Act of 1934.
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