(Art Technology Group, Inc., NASDAQ: ARTG), and eStara
today announced that the two companies signed a definitive agreement for ATG to acquire eStara in a stock and cash merger transaction. ATG has several customer relationship management (CRM) products and e-commerce enhancing software tools. They have knowledge base and help-desk solutions, live chat, content management, analytics, and more. Using eStara's click-to-call technology is a good complement to their existing portfolio.
According to eStara, eStara’s Click to Call, Click to Chat and Call Tracking solutions will advance ATG’s mission of enabling online sellers to find customers, convert them to buyers and ensure their satisfaction so they become loyal, repeat, and profitable customers. eStara’s Click to Call solution allows an online consumer to request an immediate call from a salesperson or customer care agent, via the telephone or computer.
“Over the last two years, we have consistently expanded our end-to-end commerce solutions to make it easier for companies to create more relevant interactions across the entire customer life cycle,” said Bob Burke, ATG’s President and CEO. “eStara solutions fit perfectly with our strategy as they provide an increasingly vital new channel for helping consumers go from browsing to buying. Furthermore, the combination of ATG’s on demand initiative with eStara’s pure on demand business will accelerate the expansion of our recurring revenue model.”
eStara provides technology for some of the world’s most recognizable brands including Starwood Hotels, DaimlerChrysler, Dell, Apple Computer, and Continental Airlines. Approximately 350 customers use eStara’s technology to increase online sales conversions by up to 50%, reduce Web site and shopping cart abandonment rates by 10-45%, and reduce call handling time by up to 60 seconds.
“We are looking forward to the innovation that a combination of industry leaders can bring to bear in the marketplace,” said John Federman, eStara CEO. “By joining forces with ATG, eStara can leverage both companies’ combined successes, technologies and best practices to more completely satisfy the needs of online consumers and e-commerce businesses.”
Under the terms of the agreement, ATG will acquire all of the outstanding common stock, preferred stock, vested and unvested stock options of eStara for approximately 15.3 million shares of ATG common stock, $2.0 million in cash, and up to an additional $6.0 million in earn-out potential, which implies that the total transaction is valued at up to approximately $48.3 million based on the closing sale price of ATG’s common stock as reported on the NASDAQ stock market on September 18, 2006.
eStara grew annual revenue 64% year over year to $7.4 million for full year 2005. Revenue for the first six months of 2006 was $6.5 million. Net income, in accordance with United States Generally Accepted Accounting Principles (GAAP), for full year 2005 was $1 million and $1.3 million for the first six months of 2006.