ANNAPOLIS, Md., -- June 2 -- USi, the leading enterprise Application Service Provider (ASP), announced today that it has signed a Definitive Agreement to acquire Appshop, a leading provider of application outsourcing and professional services for the complete Oracle application lifecycle. The combination of the two companies solidifies USi's leadership position in the enterprise ASP industry, with a dedicated Oracle presence complementing the company's existing offerings. Appshop adds more than 40 enterprise clients to USi's installed base of clients. The acquisition is expected to be EBITDA and operating cash flow accretive in USi's current fiscal year.
"This acquisition broadens USi's services portfolio to include Oracle applications, while immediately enhancing our bottom line, expanding our blue chip client base, and strengthening our competitive position," said Andrew A. Stern, Chairman and CEO at USi. "Like USi, Appshop has demonstrated the ability to meet the needs of enterprise clients. Both companies share a culture of superb client service, a focus on Global 2000 businesses, and a commitment to helping clients derive greater business value from their technology investments. This produces a great fit that will significantly benefit both of our client bases. We are also excited to welcome Appshop President and CEO, Larry Abramson, and his colleagues to the USi team."
"We couldn't be more pleased with today's announcement," said Larry Abramson, President and CEO of Appshop. "The entire Appshop organization has worked to create the largest independent provider of outsourced Oracle solutions. Together with USi, we can now offer our clients a broader spectrum of outsourcing services combined with expert consulting capabilities that are unparalleled in our industry."
"Appshop has proven to be a trusted business partner for Dresser, Inc. They've clearly understood our business demands and have worked closely with us as part of our ongoing efforts to implement Oracle's ERP solution to meet those ever-changing demands," said Dennis Beauchene, Global Director of Infrastructure Client Support, Dresser, Inc. "We're excited to see the team we've come to rely on so closely join forces with USi. The scale, product offering, and financial stability of the combined company will surely be an advantage to all."
The acquisition extends USi's current offerings for the outsourced hosting and management of leading Customer Relationship Management, e-Business, Enterprise Resource Planning, Enterprise Spend Management, Messaging & Collaboration, and other business-critical, enterprise applications. The clients of the combined company will benefit from its expertise across all of these core business processes, as well as from USi's complementary products and services that extend application functionality, and its targeted Business Process Outsourcing services like Benefits Administration and Payroll outsourcing.
According to Gartner, Inc., "By 2007, the market for outsourced enterprise application management services will surpass that of the old way of buying enterprise software -- for non-competitive application environments, the buy, install, and maintain model is going away. These trends are inevitable and unstoppable. Managed hosters that possess a breadth of application knowledge and expertise are well-positioned to take advantage of this growing market opportunity."
"The combination of Appshop and USi creates a powerful player in the managed services market combining both expertise and a strong footprint across numerous crucial applications," commented J. Sanford Miller, Managing Director with 3i, a leading venture investment firm, as well as a current member of Appshop's Board of Directors, who will join the Board of Directors of the combined businesses.
The acquisition is expected to close in the early part of the third quarter.
About USi
USi delivers enterprise and e-commerce software as a service. The company's portfolio of service offerings delivers the functionality of leading software from Ariba, BroadVision, Lawson, Microsoft, Oracle, PeopleSoft, and Siebel as a continuously supported, flat-rate monthly service via an advanced, secure global data center network. Additionally, USi's AppHost managed application hosting services provide the most advanced solutions for enterprises, software companies, marketplaces, public sector clients and system integrators that are seeking a better way to deliver solutions over the internet to their customers and end users. For more information, visit http://www.usi.com.
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