Expansion
into telecommunications and consumer
electronics repair services further
strengthens reverse logistics service
offering
WALTHAM, Mass.--(BUSINESS WIRE)--May
2, 2008--CMGI(R), Inc. (NASDAQ:
CMGI), a global leader in supply
chain management services, today
announced it has acquired PTS Electronics
(PTS), one of the largest independent
consumer-electronics service repair
and reverse logistics providers.
The all cash transaction is valued
at approximately $45 million. The
transaction is expected to be cash
flow positive, but neutral to earnings
in fiscal 2008, and accretive to
earnings in fiscal 2009 through
a combination of planned revenue
growth and operational synergies.
PTS is one of the nation's largest
remanufacturers of wireless and
cellular phone products, and the
largest single source for remanufactured
HDTV and digital main boards and
tuners. The variety of consumer
electronics service solutions offered
by PTS will create a strategic extension
of the end-to-end supply chain solutions
offered through ModusLink, CMGI's
supply chain services business,
enabling a more robust reverse logistics
solution for high-tech clients.
PTS' capabilities add to ModusLink's
current reverse logistics services
that include service parts management,
contact center support, asset disposition
channels and Level 1 repair. The
PTS acquisition will also tightly
integrate reverse and forward logistics
operations, enabling a more effective
global supply chain service for
ModusLink clients.
"The long-term demand for high-tech
consumer electronics continues to
grow, especially for high-value,
wireless communication devices,"
said Joseph C. Lawler, chairman,
president and chief executive officer
of CMGI. "As more consumer electronics
products proliferate in the market
and features continue to merge into
a single device, there is an increasing
need to both accelerate and improve
the value recovery from the returns
process. And fast, reliable, economical
service is essential. By acquiring
PTS, we will be positioned to meet
our clients complete reverse logistics
needs. We view the aftermarket services
space as a source of potential revenue
and earnings growth in the future,
and expect PTS to form the cornerstone
of that service offering."
"We have built our business on
strong partnerships with the goal
of continually exceeding customer
expectations," said Jack D. Craig,
chief executive officer of PTS.
"Rapid time-to-market requirements,
low-cost strategies and short product
lifecycles demand that manufacturers
have a highly responsive and tightly
integrated supply chain, which we
will now be able to offer as part
of ModusLink's end-to-end supply
chain solutions."
With four facilities in Bloomington
and Indianapolis, Indiana, PTS has
approximately 500 technical and
support staff. Based on unaudited
financial statements, the PTS business
generated 2007 revenue of approximately
$37.4 million.
About CMGI
CMGI, Inc. (NASDAQ: CMGI), through
its subsidiaries ModusLink, Open
Channel Solutions and PTS Electronics,
provides industry-leading global
supply chain management services
and solutions that help businesses
market, sell and distribute their
products around the world. In addition,
CMGI's venture capital business,
@Ventures, invests in a variety
of technology ventures. For additional
information, visit www.cmgi.com.
About ModusLink
ModusLink Corporation is a leading
provider of global, end-to-end supply
chain management solutions. The
company provides technology clients
in the software, computing, consumer
electronics, storage and communications
markets with customized supply chain
solutions that improve time-to-market,
productivity and customer satisfaction
while reducing risk and cost. ModusLink's
services include consulting and
planning, sourcing and supply base
management, manufacturing and product
configuration, fulfillment, logistics
management, e-commerce and the complete
range of aftermarket services. ModusLink
has more than 30 facilities in 13
countries, creating the largest
global footprint in the industry.
With headquarters in Waltham, Massachusetts,
the company is a subsidiary of CMGI,
Inc. (NASDAQ: CMGI). For additional
information, visit www.moduslink.com.
About PTS Electronics
PTS Electronics (PTS) is one
of the largest consumer-electronics
service repair and reverse logistics
providers, and the largest single
source for remanufactured HDTV and
digital main boards and tuners.
The company also services CATV converters,
set-top controls and automotive
audio and telematic systems. With
more than 30 years of experience
in the electronics industry, a strong
backbone of technical manpower and
state-of-the-art equipment, PTS
provides unparalleled service solutions
and component-level rebuilds. The
company maintains more than 300
test stations for live air testing
of all television products and has
more than 50,000 parts in stock
for daily rebuild demand. With headquarters
in Bloomington, Indiana, PTS serves
more than 20,000 customers nationwide,
including independent service dealers,
national retail chains, general
line distributors, third party maintenance
companies and major corporations.
PTS is a subsidiary of CMGI, Inc.
(NASDAQ: CMGI). For additional information,
visit www.ptscorp.com.
This release contains forward-looking
statements, which address a variety
of subjects including, for example,
the expected benefits of the transaction,
the expected financial contribution
of PTS and the expansion of capabilities
expected to occur as a result of
the transaction. The following important
factors and uncertainties, among
others, could cause actual results
to differ materially from those
described in these forward-looking
statements: There can be no assurance
that projected financial results
will be attained; There can be no
assurance that other suitable acquisitions
will be identified or available
on terms acceptable to CMGI; CMGI's
success depends on its ability to
execute on its business strategy
and the continued and increased
demand for and market acceptance
of its solutions and services; CMGI
may not be able to expand its operations
in accordance with its business
strategy; CMGI may experience difficulties
integrating technologies, operations
and personnel in accordance with
its business strategy; CMGI derives
a significant portion of its revenue
from a small number of customers
and the loss of any of those customers
would significantly damage its financial
condition and results of operations;
increased competition and technological
changes in the markets in which
CMGI competes; and risks associated
with international operations. ModusLink
represents a significant percentage
of CMGI's operations and the occurrence
of any of the foregoing factors
with respect to ModusLink's business
may have an adverse effect on CMGI's
results of operations and financial
results. For a detailed discussion
of cautionary statements that may
affect CMGI's future results of
operations and financial results,
please refer to CMGI's filings with
the Securities and Exchange Commission,
including CMGI's most recent Annual
Report on Form 10-K and Quarterly
Report on Form 10-Q. Forward-looking
statements represent management's
current expectations and are inherently
uncertain. We do not undertake any
obligation to update forward-looking
statements made by us.
CMGI is a registered trademark
of CMGI, Inc. and ModusLink is a
registered trademark of ModusLink
Corporation. All other company names
and products are trademarks or registered
trademarks of their respective companies.
CONTACT: CMGI
Investors-Financial:
Marina Winberg, 781-663-5012
ir@cmgi.com
or
Media:
Farrah Phillipo, 781-654-6764
PR/Communications Manager
farrah_phillipo@moduslink.com
SOURCE: CMGI, Inc.
