| Convergys Corporation announced it is expanding its global capabilities in learning outsourcing services to include innovative content development and delivery services through a strategic acquisition.
Convergys signed a purchase agreement to acquire San Francisco-based DigitalThink, Inc. (NASDAQ: DTHK) for $2.40 per share in cash, for an aggregate purchase price of approximately $120 million for all outstanding shares. DigitalThink is a leader in custom e-learning for the Fortune 1000 and the largest custom e-learning company in the industry. Its learning solutions include consulting services, cutting-edge simulations, custom online course development, and a scalable technology platform for on-demand course delivery.
"The acquisition of DigitalThink is a further demonstration of our strategic commitment to Employee Care as a major growth engine for Convergys and further strengthens our growing leadership position in HR Business Process Outsourcing. It also creates a new set of capabilities for us in the learning outsourcing segment while adding an additional revenue stream and new customers," said Steve Rolls, Convergys Executive Vice President, Global Customer Management and Employee Care. "Convergys had been working closely with DigitalThink as an alliance partner over the past several months. As a result of this strong relationship, DigitalThink became an attractive acquisition opportunity for us."
Convergys' outsourced learning capabilities will enable global organizations to improve skills and productivity for their workforce through web-based courses and simulation training.
With this acquisition, Convergys will:
- offer a new set of capabilities to help the world's top organizations maximize the value of their internal and external customer relationships through customized, on-demand courses;
- expand its capabilities in the HR Business Process Outsourcing market to meet the needs of large global organizations for full service learning solutions including consulting and course design, development, delivery,
- and administration; and support its global HR and Customer Management clients more efficiently by accelerating the effectiveness of customer support teams through on-the-job training for client programs.
"We are excited to become a part of Convergys," said Michael Pope, President and CEO of DigitalThink. "Combining forces with Convergys will allow our customers to benefit from the broad Convergys Customer Management and Employee Care offerings, and Convergys' global client base will be able to leverage the strength of our talented employees and our extensive learning services offering."
DigitalThink is headquartered in San Francisco and has about 375 employees and many clients. Historically, EDS was the company's largest client, but as a result of a recent contract dispute, EDS is no longer a DigitalThink client.
DigitalThink's Board of Directors unanimously approved the acquisition by Convergys and signed voting agreements. Integrating the DigitalThink acquisition into Convergys will be approximately $0.02 dilutive to earnings in 2004 and neutral to accretive thereafter.
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