Geoff Kerr, USWeb/CKS, 408/987-3260 or
[email protected]
Bill Matassoni, Mitchell Madison Group, 212/372-4002 or
[email protected]
USWeb/CKS to Acquire Mitchell Madison Group
Top-tier strategy firm accelerates USWeb/CKS's expansion into strategy consulting
NEW YORK - July 30, 1999 - USWeb/CKS (Nasdaq: USWB) a leader in Internet professional services, announced today that it has agreed to acquire Mitchell Madison Group, a top-tier strategy consulting firm focused on business-to-business commerce.
"We've done an excellent job growing our strategy organization over the last six months, but this move catapults USWeb/CKS forward," said Robert Shaw, CEO of USWeb/CKS. "The acquisition of Mitchell Madison Group (MMG) launches USWeb/CKS beyond market leadership to redefining the Internet professional services market, enabling USWeb/CKS to set new standards for transforming businesses in the digital economy. This first-mover advantage makes USWeb/CKS and its newly enriched talent a superior source for business and industry transformation."
"Fancy front-ends, supply chain connectivity and back-end systems integration, won't be enough to win," said Tom Steiner, co-founder and managing partner of Mitchell Madison Group. "Businesses in the new economy need to be able to do more than reduce costs, improve efficiencies, differentiate themselves and add new channels. They need to fundamentally change company and industry structure and create entirely new business models."
Founded in 1994 by 30 alumni of McKinsey & Company, MMG rapidly established their premier reputation by working with the largest financial institutions in the world on technology, sourcing and other key issues. More recently they have expanded into new industry sectors including healthcare, retail, technology and telecommunications. MMG's 550 consultants worldwide work with blue chip clients including seven of the top ten commercial banks, seven of the top ten telecommunications companies, six of the top ten investment banks and securities firms, and five of the top ten leading European industrials.
MMG's deep competencies are extremely complementary to USWeb/CKS because they provide a solid foundation for working in the digital economy, especially in business-to-business markets. They include: global payment systems and e-commerce, sourcing and supply chain transformation, electronic trading networks and settlement systems, and risk management.
"We have looked at a number of potential firms to help accelerate the build-out of our strategy consulting capabilities," said Shaw. "We determined that MMG represented an excellent fit for USWeb/CKS given their stellar reputation, their unique approach to e-commerce, their philosophy-which plays right into our time-to-value proposition-and their ability to augment our scale and presence around the world. Additionally, their proven track record in market dynamics and commerce boosts USWeb/CKS's e-services offering."
"Our clients will benefit from the combined capabilities of USWeb/CKS and MMG," added Steiner. "USWeb/CKS is the only Internet consulting firm that can offer best of breed and the critical mass of talent in the disciplines of strategy, marketing and technology. With additional high-level strategy content, we expect client relationships to lengthen and deepen. Together we will have roaming rights in the entire executive suite."
Tom Steiner will become president and COO of USWeb/CKS and will join the board of directors, effective upon closing of the acquisition. Robert Shaw will remain CEO. Toby Corey, co-founder of USWeb/CKS, will continue his active role developing strategic accounts for the company.
Under the terms of the acquisition, USWeb/CKS intends to issue approximately 14.4 million shares of USWeb/CKS stock for all of the equity interests of MMG. Of the shares to be issued, 50 percent will be issued at closing and 25 percent will be issued on each of the first and second anniversaries, subject to the achievement of certain performance targets. The company will also establish an incentive option program for MMG employees. The acquisition will be accounted for as a purchase and is expected to close in the fall. The acquisition has been approved by the boards of directors of USWeb/CKS and MMG and is subject to various closing conditions, including approval by antitrust regulators and by MMG's shareholders.
About USWeb/CKS
USWeb/CKS (Nasdaq: USWB) is the leading Internet professional services firm that works with clients to define strategies and implement innovative ways to build their businesses through a combination of expertise in 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. The company provides a broad selection of services from brand development and advertising to business process automation and e-commerce solutions. The company headquarters are in Santa Clara, California. Additional information about USWeb/CKS is available by calling 408/987-3200 or at http://uswebcks.com.
This press release contains "forward-looking statements" (as defined under securities law) regarding the planned merger of USWeb/CKS and MMG, expansion of client relationships, access to executives, and the potential benefits to be derived. The companies' actual results, including obtaining shareholder approval, gaining regulatory clearance, integrating of the two entities, maintaining customer relationships, retaining employees, expanding client relationships, growing the overall business, realizing anticipated synergies, or reaching 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 merger will be completed on the intended schedule, or at all, or 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 with the United States Securities and Exchange Commission. USWeb/CKS and the USWeb/CKS logo are registered trademarks of USWeb Corporation.