|Intuit Signs Agreement To Acquire Blue Ocean Software, Inc.,
|Broadens Intuit's "Right for My Business" Strategy to Solve Another Mission Critical Business Problem
MOUNTAIN VIEW, Calif. -
Intuit Inc. (NASDAQ: INTU) today announced it has signed a definitive agreement to acquire Blue Ocean Software, Inc., a leading provider of software solutions that helps businesses manage their information technology resources and assets. The acquisition is a significant step in Intuit's effort to expand its business solutions and go beyond accounting to solve additional mission critical customer problems. When completed, the acquisition will provide an additional platform for Intuit to drive sustained revenue and profit growth.
"The acquisition of Blue Ocean is a move into a new market segment and another example of Intuit executing its 'Right for My Business' strategy," said Steve Bennett, Intuit's president and chief executive officer. "With this acquisition, we make another significant move to broaden our business beyond accounting."
Penetrating a Large, Untapped Opportunity
The acquisition of Blue Ocean will enable Intuit to become a key provider in the $1.7 billion annual software segment to help companies manage their IT resources and assets. This market has significant opportunity for growth in the future.
"An Intuit-Blue Ocean combination represents incredible opportunity," Bennett said. "An estimated 90 percent of small and medium sized businesses rely on time-consuming, manual processes to manage their company's IT infrastructure and are great candidates for technology solutions that make their businesses more efficient and profitable. Just as we have revolutionized the way businesses manage their financials, our goal is to revolutionize how businesses manage their IT resources."
A Proven Industry Leader
Blue Ocean is a leading developer of software solutions that help businesses manage their IT resources and assets, including PC inventory, incident tracking, knowledge base resolution tools, software delivery and asset tracking. The company's solutions are simple and easy to install, and deployed to desktops, an organization's network, the Web, or on client/server systems in a matter of days, rather than weeks or months. Its products range in price from $495 software packages to enterprise solutions exceeding $11,000.
"Blue Ocean and Intuit both have strong track records of customer-driven innovation," said Russ Hobbs, Blue Ocean Software's chief executive officer and founder. "Both companies have grown and succeeded because we understand our customers and the challenges they face - and then deliver innovative, world-class solutions that help them run their businesses better. We are excited about the opportunity going forward with Intuit."
Blue Ocean supports more than 31,000 customers. A vast majority of Blue Ocean's customers have fewer than 250 employees, a segment where Intuit is the leader in accounting. The company is headquartered in Tampa, Florida.
Intuit currently plans to operate Blue Ocean as a business unit within its Small Business and Personal Finance division led by Russ Hobbs and will continue to offer Blue Ocean's current products and services. Hobbs will become a vice president at Intuit reporting to Lorrie Norrington, executive vice president, Small Business and Personal Finance. Virtually all of Blue Ocean's 78 employees will be asked to stay with the business. Blue Ocean will continue to be based in Tampa, Florida.
Terms of Agreement
Under the terms of the agreement, Intuit will acquire all outstanding shares of Blue Ocean's stock for approximately $170 million in cash. Intuit expects Blue Ocean to contribute approximately $45 million to $55 million in revenue in fiscal year 2003. The acquisition is expected to close in the first quarter of fiscal 2003. The impact of the proposed acquisition has been included in the financial guidance provided by Intuit as part of its fourth quarter 2002 quarterly earnings announcement.
About Intuit Inc.
Intuit Inc. (NASDAQ: INTU) is a leading provider of business and financial management solutions for small businesses, consumers and accounting professionals. Its flagship products and services, including QuickBooks®, Quicken® and TurboTax®, simplify small business management and payroll processing, personal finance, and tax preparation and filing.
Founded in 1983, Intuit has annual revenue of more than $1 billion. The company has over 6,000 employees with major offices in 19 states across the U.S. and offices in Canada, Japan and the United Kingdom. More information can be found at www.intuit.com.
About Blue Ocean Software, Inc.
Blue Ocean Software, Inc. is a leading developer of help desk, PC inventory, and systems management solutions that are powerful, scalable and full featured, yet easy to install, learn and use.
The company's solutions are deployed on an organization's network, the Web, or on client/server systems in a matter of days, rather than weeks or months. Blue Ocean Software is based in Tampa, Florida and has its European headquarters in London, England.
Blue Ocean Software was recognized by Inc. Magazine as one of the fastest growing companies in the country in 2001. Ranked 55th on the Inc. 500 list, the company earned its position by growing roughly 100 percent per year for five consecutive years. Blue Ocean Software, Inc. also was recently named to Software Magazine's list of the top 500 largest software companies in the world. The company continues to hire world-class employees with technical, sales, and marketing skills for its operations in Tampa and London.
Cautions About Forward-Looking Statements; Intuit's Policy on Providing Guidance
This press release includes forward-looking statements about future financial results and other events that have not yet occurred, including predictions about the company's proposed acquisition of Blue Ocean Software, Inc. and the company's expected results for fiscal 2003. Statements with words like "expect," "anticipate" or "believe," and statements in the future tense, are forward-looking statements. Actual results may differ materially from the company's expressed expectations because of risks and uncertainties about the future. The company will not update the information in this press release if any forward-looking statement later turns out to be inaccurate. Risks and uncertainties that may affect future results and performance include, but are not limited to, those described below. More details about these and other risks are included in the company's fiscal 2001 Form 10-K and other SEC filings, and at www.intuit.com/company/investors/considerations.html.
Risks and uncertainties affecting the proposed acquisition of Blue Ocean Software, Inc. include the following:
- The closing of the transaction is subject to standard closing conditions, including but not limited to various regulatory approvals.
- The anticipated benefits of Blue Ocean Software, Inc.'s products and services to Intuit (including but not limited to the expected financial impact for fiscal 2003) will depend on a number of variables, including our ability to retain personnel, our ability to acquire and retain customers, and particularly the rate at which potential customers are willing to replace manual paper-based approaches or proprietary legacy systems; and the company's ability to offer quality products at competitive prices.
- If the acquisition is completed, integrating Blue Ocean Software, Inc. and Intuit will create challenges for Intuit's operational, financial and management information systems. If the integration poses greater than anticipated challenges and risks, the acquisition could have a negative impact on Intuit's operating results.
Risks and uncertainties affecting the company's fiscal 2003 financial guidance provided in this press release include the following:
- If for any reason the acquisition of Blue Ocean Software, Inc. is not completed, Intuit may not realize the guidance levels provided in this press release. Furthermore, even if the acquisition is completed in a timely manner, there are a number of risks and uncertainties that may affect Intuit's ability to achieve the guidance levels, including those described below.
- The company's revenue and earnings are highly seasonal, which causes significant quarterly fluctuations in its revenue and net income.
- Acquisition-related charges can substantially reduce the company's net income, and cause significant fluctuations in net income. Under the new Financial Accounting Standards Board guidelines relating to accounting for goodwill, the company's acquisition-related charges may be less predictable in any given reporting period, as the company could incur less frequent, but larger, impairment charges related to goodwill.
- Integrating acquired businesses creates challenges for the company's operational, financial and management information systems, as well as for its product development processes. If the company is unable to adequately address these and other issues presented by growth through acquisitions, the company may not fully realize the intended benefits (including financial benefits) of its acquisitions.
- It is too early to ensure that the company's "Right for My Business" strategy will generate substantial and sustained revenue growth in the small business accounting and business management segments.
- The company faces competitive pressures in all of its businesses, and particularly in its consumer tax preparation software and services business. This can have a negative impact on the company's revenue, profitability and market position. In particular, if federal and /or state government agencies are ultimately successful in their efforts to provide tax preparation and filing services to consumers, it could have a significant negative impact on the company's financial results in future years.
- The company does not expect that the revenue and profit growth rates experienced by its payroll business during the past two years will be sustainable long-term, either on a year-over-year basis or on a sequential quarter basis.
- The company relies heavily on third-party vendors in connection with its primary retail desktop software product launches and replenishing product in the retail channel after the primary launch. If a vendor fails to perform, it could have severe negative consequences for the company's software businesses.
- If the company fails to maintain reliable and responsive service levels for its electronic tax offerings, it could lose revenue and customers.
- The company faces risks relating to customer privacy and security and increasing governmental regulation, which could hinder the growth of its businesses.
- Despite the company's efforts to adequately staff and equip its customer service and technical support operations, it cannot always respond promptly to customer requests for assistance.
- Actual product returns may exceed the company's product return reserves, particularly for the company's tax preparation software.
- A continuation of the recent general decline in economic conditions could lead to significantly reduced demand for the company's products and services.
- The company's business operations depend on the efficient and uninterrupted operation of a large number of computer and communications hardware and software systems, which are vulnerable to damage or interruption form electrical power interruptions, telecommunications failures, earthquakes, fires, floods, terrorist activities and their aftermath, and other similar events. Any significant interruptions in the company's ability to conduct its business operations would reduce its revenue and operating income.
Pro forma financial information is not prepared in accordance with GAAP. Because there are no industry standards for presenting pro forma results, the method Intuit uses may differ from the methods used by other companies.
Intuit's policy is not to confirm, update or otherwise comment on its financial projections except in compliance with Regulation FD.
Intuit, the Intuit logo, Quicken, QuickBooks, Quicken Loans and TurboTax, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries. Quicken.com, among others, is a trademark and/or service mark of Intuit Inc. or one of its subsidiaries, in the United States and other countries. Other parties' trademarks or service marks are the property of their respective owners and should be treated as such.