Acquisition expected to be immediately accretive to non-GAAP earnings
per share and cash flow
Will bolster core offerings to small and medium-sized businesses and
enterprises
BEDFORD, Mass.--(BUSINESS WIRE)--Mar. 28, 2019--
Progress (NASDAQ: PRGS), the leading provider of application development
and digital experience technologies, today announced that it has entered
into a definitive agreement to acquire privately held Ipswitch, Inc., a
leading producer of award-winning and easy-to-use secure data file
transfer and network management software, for $225 million in cash.
Progress will fund the transaction with existing cash on hand and funds
secured under a new credit facility. The transaction is expected to be
immediately accretive to both non-GAAP earnings per share and cash flow.
The acquisition will bolster Progress’ core offerings to small and
medium-sized businesses (SMBs) and enterprises, enabling those
businesses to respond faster to business demands and to improve
productivity.
Founded in 1991, Ipswitch serves approximately 24,000 customers in 170
countries. Ipswitch targets IT professionals and CTOs at SMBs and
enterprises across a variety of industries. Ipswitch has approximately
$75 million in revenue, of which 75% is recurring. Ipswitch has
blue-chip customers across all verticals, including finance and banking,
healthcare, insurance, retail, government and biotech.
Ipswitch’s primary products, MOVEit®, WhatsUp®
Gold and WS_FTP®, enable
small and medium-sized businesses and enterprises to provide secure data
sharing and ensure high-performance infrastructure availability. MOVEit®, their
flagship secure data transfer product, allows enterprise customers to
securely transfer critical business information between users, locations
and partners in compliance with data security regulations such as HIPAA,
PCI DSS and the EU’s GDPR. WhatsUp®
Gold enables small and medium-sized businesses and enterprises to
continuously monitor and manage their IT infrastructure and
applications, assuring high levels of performance and availability.
WS_FTP® delivers FTP-based secure file transfer server and client
capabilities to meet the needs of small and mid-sized businesses.
“Ipswitch has an excellent reputation, top quality products, a thriving
customer base and partner ecosystem and highly skilled and engaged
employees,” said Yogesh Gupta, CEO of Progress. “We are excited by the
opportunity this acquisition affords both companies and our respective
customers, partners and employees. Progress and Ipswitch have a common
legacy of enabling businesses to solve mission-critical challenges with
efficient, easy-to-use solutions.”
Gupta continued, “We’ve been saying for more than a year now that
accretive M&A is an important part of our strategy. Ipswitch is exactly
the type of acquisition we’ve been targeting to drive increased scale
and cash flows. This acquisition meets all of our disciplined
acquisition criteria and will provide excellent returns to our
shareholders.”
“We are extremely proud of the incredible achievements and momentum the
Ipswitch team has created to date,” said Michael Grossi, CEO of
Ipswitch. “We expect this new chapter with Progress to provide even
greater opportunities for our combined customers, partners and
employees.”
Transaction Details
The acquisition is expected to close in late April, subject to obtaining
regulatory consents and satisfaction of other customary closing
conditions. Progress expects to fund a portion of the purchase price
with debt, and the company will provide further details regarding the
funding and debt structure after the transaction is closed.
More information can be found in our presentation at www.progress.com.
Atlas Technology Group acted as financial advisor to Ipswitch in
connection with the transaction. Wilmer Cutler Pickering Hale and Dorr
LLP served as Progress' legal counsel and Latham & Watkins LLP served as
Ipswitch’s legal counsel with respect to the transaction.
More information on Ipswitch can be found at www.ipswitch.com.
Conference Call
Progress will hold a conference call to review its financial results for
the fiscal first quarter of 2019, as well as the proposed acquisition of
Ipswitch, at 5:00 p.m. ET on Thursday, March 28, 2019. The call can be
accessed on the investor relations section of the company’s website,
located at www.progress.com.
Additionally, you can listen to the call by telephone by dialing
1-800-458-4121, pass code 2762629. The conference call will include
comments followed by questions and answers. An archived version of the
conference call and supporting materials will be available on the
Progress website within the investor relations section after the live
conference call.
Note Regarding Forward-Looking Statements
This press release contains statements that are “forward-looking
statements” within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Progress has identified some of these forward-looking
statements with words like “believe,” “may,” “could,” “would,” “might,”
“should,” “expect,” “intend,” “plan,” “target,” “anticipate” and
“continue,” the negative of these words, other terms of similar meaning
or the use of future dates.
Risks, uncertainties and other important factors that could cause actual
results to differ from those expressed or implied in the forward looking
statements include: uncertainties as to the timing of the closing of
Progress's acquisition of Ipswitch; the possibility that various closing
conditions for the transaction may not be satisfied or waived, including
that a governmental entity may prohibit, delay or refuse to grant
approval for the consummation of the transaction; the effects of
disruption from the transaction making it more difficult to maintain
relationships with employees, licensees, other business partners or
governmental entities; other business effects, including the effects of
industry, economic or political conditions outside of Progress’ or
Ipswitch’s control; transaction costs; actual or contingent liabilities;
uncertainties as to whether anticipated synergies will be realized; and
uncertainties as to whether Ipswitch’s business will be successfully
integrated with Progress' business.. For further information regarding
risks and uncertainties associated with Progress' business, please refer
to Progress' filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the fiscal year ended
November 30, 2018. Progress undertakes no obligation to update any
forward-looking statements, which speak only as of the date of this
press release.
About Progress
Progress (NASDAQ:
PRGS) offers the leading platform for developing and deploying strategic
business applications. We enable customers and partners to deliver
modern, high-impact digital experiences with a fraction of the effort,
time and cost. Progress offers powerful tools for easily building
adaptive user experiences across any type of device or touchpoint,
award-winning machine learning that enables cognitive capabilities to be
a part of any application, the flexibility of a serverless cloud to
deploy modern apps, business rules, web content management, plus leading
data connectivity technology. Over 1,700 independent software vendors,
100,000 enterprise customers, and 2 million developers rely on Progress
to power their applications. Learn about Progress at www.progress.com
or +1-800-477-6473.
Progress and Progress Software are trademarks or registered trademarks
of Progress Software Corporation and/or its subsidiaries or affiliates
in the U.S. and other countries. Any other names contained herein may be
trademarks of their respective owners.
About Ipswitch
Ipswitch is making the networked world a safer place to share data.
Ipswitch develops software solutions for SMBs and enterprises that
assure secure data sharing and high-performance infrastructures. Its
efficient, easy-to-use products empower customers to respond faster to
business demands through accelerated implementations and improved
productivity. Headquartered in Burlington, MA, Ipswitch supports tens of
thousands of customers around the world with our MOVEit®, WhatsUp® Gold
and WS_FTP® products. Learn more at www.ipswitch.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190328005934/en/
Source: Progress
Investor Contact:
Brian Flanagan
Progress Software
+1
781 280 4817
flanagan@progress.com
Press Contact:
Erica Burns
Progress Software
+1
888 365 2779 (x3135)
erica.burns@progress.com
