Rainmaker Expands Asia and Offshore Capabilities with Acquisition of Philippines-Based Qinteraction
(Archive News Story - Products mentioned in this Archive News Story may or may not be available from the manufacturer.)
Rainmaker Systems, Inc.
900 East Hamilton Ave.
Campbell, CA, 95008
Press release date: July 23, 2007
CAMPBELL, Calif., July 23 /-- Rainmaker Systems, Inc. (NASDAQ:RMKR), a leading provider of sales and marketing solutions combining hosted application software and execution services, today announced it has acquired privately held Qinteraction, an offshore call center located in the central business district of Manila, Philippines.
Founded in 1999, Qinteraction operates on a 24/7 basis in support of its clients' business needs, providing a variety of business solutions including inbound sales and order-taking, inbound customer care, outbound telemarketing and lead generation, logistics support, and back-office processing. The Company generated approximately $6.8 million in revenue in calendar year 2006, and has a diverse base of more than 27 clients, with US clients accounting for approximately 75% of revenue and local Philippines-based clients accounting for approximately 25% of revenue. Qinteraction clients range from start-ups to Fortune 500 companies in logistics, telecommunications, technology, and manufacturing.
Under the terms of the acquisition, Rainmaker paid at closing a total of $11.5 million, including $7.0 million in cash, and $4.5 million in Rainmaker common stock representing 559,284 shares, based on the average closing stock price for the five days immediately preceding the closing. The agreement provides for 13.5% of the total consideration to be held in escrow, comprising $945,000 in cash and 75,503 shares. Two-thirds of the escrow will be available for release at the end of twelve months from closing and the remaining one-third at fifteen months, subject to post-closing conditions, potential adjustments and offsets. The issued shares are subject to a lockup with shares available for sale from closing as follows: 241,890 shares after six months, 292,226 shares after one year, and 25,168 shares available for sale after 15 months from closing, subject to post-closing conditions and potential adjustments.
The agreement also provides for a potential additional payment at the end of twelve months, based on the achievement of certain financial milestones for the 12 month period ending June 30, 2008, ranging from no additional payment up to a maximum of $4.5 million in cash and $3.5 million in Rainmaker common stock, subject to potential offset and post-closing conditions. Rainmaker expects the acquisition to result in a slight reduction in its fiscal 2007 GAAP EPS, due to integration and acquisition related costs and amortization of acquired intangibles. Rainmaker believes this acquisition provides significant strategic benefits and synergies to make the acquisition accretive by the end of 2008.
Michael Silton, Rainmaker's CEO, commented: "Qinteraction is an established provider of innovative and cost-effective business solutions that help businesses significantly grow their revenue. They bring significant capabilities and a strong and experienced management team with a proven track record of achieving solid business growth. This acquisition provides Rainmaker entry into an important geographic area and the opportunity to leverage a lower cost structure to further expand our business internationally."
Rainmaker Systems, Inc. delivers sales and marketing solutions, combining hosted application software and execution services designed to drive more revenue for our clients. Our Revenue Delivery Platform(SM) combines proprietary, on-demand application software and advanced analytics with specialized sales and marketing execution services. Rainmaker clients include large enterprises in a range of industries, including computer hardware and software, telecommunications, and financial services industries. For more information visit http://www.rmkr.com/ or call 800-631-1545.
Source: Rainmaker Systems, Inc.
CONTACT: Steve Valenzuela, Chief Financial Officer of Rainmaker Systems, Inc., +1-408-626-2439, firstname.lastname@example.org; or Todd Kehrli or Jim Byers, Investor Relations, both of MKR Group, Inc., +1-323-468-2300, email@example.com, for Rainmaker Systems, Inc.
Web site: http://www.rmkr.com/