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Photo taken by flickr user Tostie14 of Wikimedia Commons
Blackboard Inc. (Nasdaq: BBBB) today announced that it has entered into a definitive agreement to acquire privately-held Saf-T-Net, Inc., provider of AlertNow, a leading messaging and mass notification solution for the K-12 marketplace, for approximately $33 million in cash, excluding transaction costs and subject to certain adjustments.
“Our acquisition of AlertNow broadens our mass notification offerings, extends our focus on mobile devices and creates greater value for our significantly expanded K-12 client base. The strength of AlertNow’s value proposition is evidenced by their rapid growth, and we believe its addition to Blackboard will further enhance our momentum,” said Michael Chasen, CEO and President of Blackboard. “AlertNow has enjoyed strong renewal rates and we look forward to delivering the highest service levels to our broader base of clients. We are also excited to welcome our new colleagues from the AlertNow team to Blackboard.”
“Blackboard shares our enthusiasm for serving the needs of parents, teachers and administrators across the K-12 market,” said Robert Bruce, President and CEO of Saf-T-Net. “We look forward to working with the Blackboard team to provide our clients and industry with an even broader selection of communication offerings and new innovations.”
Headquartered in Raleigh, NC, Saf-T-Net employs approximately 65 professional staff serving K-12 clients located throughout the U.S. With more than 2,000 K-12 clients, Saf-T-Net increases Blackboard’s commitment to the K-12 market. In addition, Saf-T-Net provides features and functionality that will enhance and accelerate development for Blackboard’s own messaging and mass-notification offering Blackboard Connect™, including: new Parent Portal technology; enhanced survey capabilities; and multi-lingual capabilities. The broadened capabilities and client base provides significant opportunities, and there is the potential to realize long-term infrastructure cost benefits as a result of the increased scale from the combined operations.
Guidance for the First Quarter of 2010
Blackboard management does not expect that the acquisition of Saf-T-Net will have an impact on the Company’s first quarter financial results given an anticipated closing in late March. Accordingly, Blackboard management is re-affirming its previous guidance for the first quarter 2010 as follows:
- Revenue of $98.6 to $102.6 million;
- Amortization of acquired intangibles of approximately $8.9 million;
- Stock-based compensation expense of approximately $5.1 million;
- GAAP net income of $3.2 to $5.7 million, resulting in GAAP net income per diluted share of $0.09 to $0.16, which is based on an estimated 34.8 million diluted shares, and an estimated effective tax rate of approximately 36 percent;
- Non-GAAP adjusted net income of $12.5 to $15.1 million, which excludes stock-based compensation expense, amortization of acquisition-related intangible assets, and non-cash interest expense, all net of taxes; and
- Non-GAAP adjusted net income per diluted share of $0.36 to $0.43 based on an estimated 34.8 million diluted shares and an estimated effective tax rate of approximately 38.5 percent.
Updated Guidance for the Full Year 2010
Blackboard management currently expects Saf-T-Net to contribute approximately $5.5 million to Blackboard’s 2010 GAAP revenue, assuming the anticipated late March closing date for the acquisition. The Company also expects the acquisition to be dilutive to full year 2010 by approximately ($0.09) to GAAP net income per diluted share and by approximately ($0.05) to non-GAAP net income per diluted share. Management estimates that there will be approximately ($0.04) per share of dilution in Q2 2010 to non-GAAP net income primarily related to the purchase accounting adjustment to Saf-T-Net’s deferred revenue and an additional ($0.01) per share of dilution in Q4 2010 to non-GAAP net income related to the timing of non-recurring integration costs. The Company currently expects Saf-T-Net to have a positive impact on non-GAAP net income per diluted share beyond 2010.
For full year 2010, Blackboard currently expects:
- Revenue of $429.5 to $445.5 million;
- Amortization of acquired intangibles of approximately $35.0 million;
- Stock-based compensation expense of approximately $20.2 million;
- GAAP net income of $19.7 to $30.1 million, resulting in GAAP net income per diluted share of $0.56 to $0.85, which is based on an estimated 35.5 million diluted shares; and an estimated effective tax rate of approximately 36 percent;
- Non-GAAP adjusted net income of $56.8 to $67.1 million, which excludes stock-based compensation expense, amortization of acquisition-related intangible assets, and non-cash interest expense, all net of taxes;
- Non-GAAP adjusted net income per diluted share of $1.60 to $1.89 based on an estimated 35.5 million diluted shares and an estimated effective tax rate of approximately 38 percent;
- Cash flow from operations of $100.0 to $110.0 million; and
- Capital expenditures of approximately 4 to 5 percent of total revenue.
Corporate Presentation to Investment Community
At 9:15 a.m. ET today, John Kinzer, Chief Financial Officer and Michael J. Stanton, Senior Vice President, Finance & Treasurer will provide a corporate presentation to analysts and investors from the Raymond James 31st Annual Institutional Investors Conference in Orlando, FL. The presentation will include commentary related to the acquisition of Saf-T-Net and can be accessible via webcast through the Investor Relations tab of the Company’s web site at http://investor.blackboard.com or at the conference web site at http://www.wsw.com/webcast/rj54/bbbb/.
