Geoff Kerr, USWeb/CKS, 408-987-3260 or
[email protected]
Kate Wagner, USWeb/CKS, 408-987-3268 or
[email protected]
Stockholders Approve Merger of USWeb Corporation and CKS Group
Combined company forms powerhouse integrated strategy, Internet services and marketing communications firm
SANTA CLARA, Calif. - December 17, 1998 - USWeb Corporation (Nasdaq: USWB) and CKS Group, Inc. (Nasdaq: CKSG) today announced the closing of the merger between the two companies, following approval of both companies' stockholders. The union brings together Internet technology and strategy expertise with marketing communications expertise to help companies differentiate their products and services, strengthen client relationships, leverage human capital, and improve business efficiency in the new electronic economy.
Effective immediately, the new company will do business as USWeb/CKS and trade on the Nasdaq Stock Exchange under the symbol USWB, which has been the symbol for USWeb Corporation. As previously announced, the name "Reinvent Communications," which was the original name chosen for the combined company but which was subject to a legal claim, will not be used.
"USWeb was founded upon the premise that the Internet is fundamentally transforming business, and CKS had independently shared a common vision. In the new economy, internal applications and systems, E-commerce initiatives, and external marketing communications must be tightly integrated," said Robert Shaw, chief executive officer of USWeb/CKS. "By combining forces, and making CKS Group and USWeb one company, we can carry forward this vision - now with broader and deeper capabilities -and respond to client needs in entirely new ways."
"Combining the right brain and left brain skill sets of marketing and technology takes discipline. It doesn't just happen," said Mark Kvamme, chairman of USWeb/CKS. "To translate the merger into value for our clients, USWeb/CKS will have to truly integrate the expertise of two companies to look at the world through a new lens. There is powerful synergy across our service offerings, our markets and our organizations. We believe the combination of skills, services and approaches that result from this merger will establish USWeb/CKS as the premier partner for companies facing rapid change."
In conjunction with the close of the merger, Mark Kvamme, CKS chairman and CEO, will become Chairman of the Board of USWeb/CKS. Current USWeb CEO Robert Shaw will hold the same position following the merger. Joe Firmage, chief strategy officer of USWeb, Toby Corey, president and COO of USWeb, Tom Suiter, chief creative officer of CKS Group, Sheldon Laube, chief technology officer of USWeb, and Carolyn Aver, CFO of USWeb, will retain their existing titles with the combined company.
USWeb/CKS Service Offering
By blending the strategy, marketing, technology and industry-specific expertise of the two companies, USWeb/CKS will provide a uniquely integrated service offering to help clients in the following areas:
� Differentiate Products and Services
USWeb/CKS has the capabilities and expertise to position a company's products and services into their own unique niche in the market. USWeb/CKS can build marketing communication programs that include corporate and product brand development, relationship marketing and audience development.
� Build Stronger Customer Relationships
Building stronger customer relationships is a growing requirement for the companies USWeb/CKS works with. With an excellent track record of helping clients build the right tools to reach their customers in new ways, USWeb/CKS can work with clients to establish one-on-one relationships with customers through customer intelligence programs, data warehousing and customer response and service systems.
� Leverage Human Capital
USWeb/CKS can develop communications systems that help employees within a company reach new standards of performance and efficiency while lowering the company's costs. USWeb and CKS have worked with clients to build internal systems that help employees access key information and share knowledge � accelerating the process of their work and building collaboration across the company.
� Improve Business Efficiency
USWeb/CKS can design systems and processes that improve the efficiency of a business, accelerate transactions, lower error rates, streamline the processing of records, and build systems that control everything from tracking customer requirements to printing paychecks.
"In a world of new rules and new competitors, USWeb/CKS can help clients take advantage of change by partnering with them to develop a real world strategy and then implementing the solutions that turn that strategy into value for their business," said Toby Corey, president and chief operating officer of USWeb/CKS. "With more than 1,900 professionals worldwide and a client base including Audi, Harley Davidson, General Motors, Janus, Levi's, NBC and Visa, USWeb/CKS has helped hundreds of businesses strategically leverage marketing communications and technology to seize new opportunities."
Terms of the Deal
Under the terms of the transaction, USWeb is exchanging 1.5 shares for each share of CKS stock in a transaction valued today at approximately $540 million, with expected merger and integration costs of approximately $34 million related to the combination of the two companies. These costs include amounts identified previously, which have increased as a result of the increase in USWeb's stock price, as well as additional costs now qualified for inclusion due to the identification of specific integration actions. The merger and integration costs, which are expected to be incurred primarily in the current quarter and the first quarter of 1999, consist principally of investment banking and other professional fees, lease termination costs, filing fees and other transaction-related costs, and payments to certain employees for either retention or severance. In addition, the company will take a charge in the current quarter of approximately $11 million for the write-off of an impaired asset obtained by CKS Group in a previous acquisition.
Company Background
USWeb/CKS (Nasdaq: USWB) is a professional services firm that works with companies to define strategies and implement innovative ways to build their businesses by combining the expertise of strategy, Internet technology and marketing communications. USWeb/CKS helps clients differentiate their products and services, strengthen customer relationships, leverage human capital, and improve business efficiency in the new electronic economy. With more than 1,900 professionals, USWeb/CKS has helped hundreds of businesses advance their marketing communications programs as well as traditional IT and Internet systems�everything from brand development and advertising to business process automation and e-commerce solutions. The Company is headquartered in Santa Clara, California. Additional information about USWeb/CKS is available by calling 408-987-3200.
This press release contains "forward-looking statements" (as defined under securities law) regarding the merger of USWeb and CKS Group, their operation as a combined company, and the potential benefits to be derived. USWeb/CKS's actual results, including its ability to complete the integration of the two entities, maintain customer relationships, retain employees, maintain or increase market share, grow the overall business, assist customers, realize anticipated synergies, or reach any expected revenue or earnings objectives, may differ materially and adversely from those discussed in this press release. Factors that may cause such a difference include, without limitation, risks associated with acquisitions, such as difficulties in integrating operations, loss of customer accounts, inability to retain employees, decline in growth rate, challenges or costs involved in combining technologies or services, merger-related costs, adverse fluctuations in stock prices, potential litigation, and diversion of management attention from other business concerns. There can be no assurance that the combined entities will be able to realize the intended benefits. For additional information about factors that could affect the business of USWeb/CKS, see the documents filed by USWeb and CKS Group with the United States Securities and Exchange Commission.