"We're thrilled to have Tamaleâs innovative technology and proven team on board as we enter the nascent and fast-growing RMS market,â said Adventâs Founder and CEO Stephanie DiMarco. âWe chose Tamale Software because, as the clear industry leader and a pioneer in the field of RMS, they bring unparalleled vision and a track record of success as we extend Adventâs footprint in the front office with this powerful, game-changing productivity tool for our clientsâ investment teams."
The Tamale Solution
In recent years, the investment community has struggled to effectively manage and leverage across their organizations a massive influx of investment information (sell-side research, email, independently produced analysis, news, and internet content) in an increasingly complex compliance environment.
Tamale Software solves this problem with Tamale RMSÂ®, the firm's innovative workflow software solution that creates a centralized information hub to easily manage and access research information, enhancing collaboration across the investment team and optimizing the investment decision-making process.
Since pioneering the RMS space in 2004, Tamale Software has become a clear leader, with more than 1,700 investment professionals at hedge funds, endowments, funds of funds, private equity firms and traditional asset management firms using Tamale RMSÂ® to manage their workflow and research process. Tamaleâs intuitive, easy-to-use and extensible RMS platform was named the best front-office innovation of 2007 by The Banker magazine, and Tamale Software was named to Financial News magazineâs 2007 list of 21 companies shaping the 21st century.
A Powerful Combination
âBecoming part of the Advent team gives Tamale a tremendous opportunity to expand our global reach and bring the benefits of RMS to a much wider audience,â said Tamaleâs President and CEO, Mark Rice. âWe are excited to be joining forces with a proven leader that shares our commitment to innovation and driving success for our clients.â
âTamale RMSÂ® complements Adventâs product offerings, and the integrated solution will bridge research management and portfolio management to increase efficiency and link analystsâ recommendations to investment performance,â continued Adventâs DiMarco. âWe are tremendously excited to work with Tamale Software to continue to deliver on the promise of automating mission-critical business processes for our investment management clients.â
The Tamale management team and its employees, based primarily in New York, Boston and the UK, will join Advent, and will continue to develop, service and sell the Tamale solution.
Terms of Agreement
Under the terms of the agreement, Advent will pay approximately $70 million for all of the outstanding capital stock of Tamale, with 60 percent of the consideration payable in shares of Adventâs common stock and the remaining 40 percent in cash. Advent will issue approximately 900,000 shares based on the average closing price of $46.44 for the 15 trading days prior to the signing date, in addition to approximately $28 million in cash consideration, subject to adjustment for third-party expenses and certain other specified items. No options will be assumed by Advent in connection with this transaction. The acquisition is subject to customary closing conditions and is expected to be completed during the fourth quarter of 2008.
Tamale is a subscription-based business. Based on Tamale's 2008 customer acquisition and run rate, Advent estimates 2009 revenue from Tamale to be in the range of $17 to $20 million. In addition, Advent expects the transaction to be neutral to earnings per share (EPS) in 2009 on a non-GAAP basis and dilutive to EPS on a GAAP basis, which will include stock-based compensation and amortization of acquisition-related intangibles.
GCA Savvian Advisors, LLC acted as exclusive financial advisor to Tamale on this transaction.
Stock Repurchase Program
Advent also announced that the Company will be entering into a pre-arranged Rule 10b5-1 trading plan with a broker to facilitate the repurchase of its shares of common stock, pursuant to the requirements of and in conformity with the provisions of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. Under the trading plan, Advent may repurchase shares without suspension for trading blackout periods. The shares to be repurchased under the trading plan will be part of the stock repurchase program approved in May 2008 to repurchase up to 1.0 million shares under Rule 10b-18. The 10b5-1 trading plan will commence on October 1, 2008 and purchases will be made by a broker and based upon the guidelines and parameters of the 10b5-1 plan.