Pegasystems Inc. to Acquire 1mind Corporation; Acquisition Will Expand Pegasystems' Presence in Healthcare and Insurance CRM Markets
CAMBRIDGE, Mass., Jan 29, 2002 — Pegasystems Inc. (NASDAQ: PEGA), a provider of rules-driven, process automation software for CRM, today signed a definitive agreement to acquire 1mind Corporation, a privately held company and recognized provider of CRM and e-business solutions for healthcare payer and insurance companies. The acquisition reaffirms Pegasystems commitment to leadership in the healthcare and insurance markets. Pegasystems believes that the acquisition will increase its penetration of the healthcare and insurance markets, strengthen its management and delivery teams and deepen its product offerings. Additional information regarding the acquisition will be discussed in a conference call with Pegasystems and 1mind executives on Tuesday, January 29, 2002 at 4:30 p.m. EST.
The integration of the two companies will result in Pegasystems substantially increasing its Blue Cross Blue Shield customer base. Upon closing the acquisition, Pegasystems will count approximately eighteen-percent of the Blue Cross Blue Shield health insurers as clients. Additionally, Pegasystems will add several other large, well-known healthcare and insurance companies to its client roster.
Pegasystems will gain the strong healthcare and insurance expertise of 1mind's seasoned leadership team, whose senior members bring a combined forty years of experience and important industry relationships to the Company. Tom Congoran, president of 1mind and former COO of Blue Cross Blue Shield of New Hampshire, will join Pegasystems as the leader of its newly formed healthcare and insurance business unit. Additionally, Pegasystems believes it will benefit from the extensive industry experience and functional knowledge of 1mind's employees, including actuarial and underwriting professionals.
"The acquisition of 1mind will help position Pegasystems as a leader in the CRM healthcare and insurance markets," said Rick Jones, president and COO, Pegasystems. "The addition of 1mind's healthcare and insurance industry expertise, combined with its success in selling to insurance and healthcare payers, expands Pegasystems' sales and service capabilities and broadens our ability to offer solutions in the insurance and healthcare markets. We are committed to continuing our strategy of incorporating industry best practices into our business rules based CRM offerings."
Pegasystems and 1mind have had experience offering their complementary solutions. The Company plans to integrate the offerings to provide a broad set of customer service and support functionality for member services and claims exceptions processing activities. The Company will continue to offer 1mind's sales and marketing, underwriting and enrollment applications. Pegasystems believes that the result will be comprehensive, healthcare and insurance specific, front and back-office CRM solutions. The solutions will help address the growing needs of the healthcare and insurance markets, in areas such as: HIPAA compliance, claims exception processing productivity, and improved customer and member satisfaction.
"This acquisition reflects the trend toward providing full function, industry-specific CRM product suites to today's healthcare market," commented Joanne Galimi, research director, Gartner Inc. "More importantly, it helps expand the use of rules based process automation, a key requirement for profitable, enterprise wide customer service automation."
"We believe the CRM healthcare and insurance markets present a significant opportunity for growth," said Tom Congoran, president of 1mind. "The integration of 1mind with Pegasystems provides our healthcare and insurance customers with access to reliable technology and underwriting, customer service and actuarial expertise. Some of our customers include: Anthem Blue Cross Blue Shield of New Hampshire, Blue Cross Blue Shield of Rhode Island, Horizon Blue Cross Blue Shield of New Jersey, Blue Cross Blue Shield of Montana, Allianz Life Insurance Company, and Northeast Delta Dental."
Added Congoran, "We are excited to join Pegasystems and believe that together, we are poised to aggressively capture a leadership position in the healthcare and insurance CRM markets."
The transaction will be structured as a purchase of 1mind's assets for shares of, and warrant for, Pegasystems' common stock valued at approximately $3.6 million dollars. Up to approximately $6 million of additional Pegasystems' stock may be issued in 2003, as additional consideration.
The Company will be hosting a conference call and live Webcast associated with this announcement at 4:30 p.m. EST on Tuesday, January 29, 2002. Dial-in information is as follows: 888-686-9639 (local), 781-482-0083 (international). A digital replay of the teleconference will be available at 888-836-6074 (local), 703-925-2502 (international), with a passcode of 5800477.
If interested in listening to the Webcast, log onto www.pegasystems.com at least 5 minutes prior to the event's broadcast, and click on the Webcast icon in the "Investors" section.
Forward Looking Statements
Certain statements contained in this press release may be construed as "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan," and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. The company does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause the Company's actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties include the possibility that the transaction may not close, the possibility that the integrated products may not work as expected, the possibility that the market might not grow at the projected rate, impact of pending regulatory proceedings, difficulty in predicting the completion of product implementations and consequently the timing of revenue recognition, the inability to attract and retain key employees, reliance on key third-party relationships, management of the Company's growth, and other risks and uncertainties. Further information regarding these and other factors which could cause the Company's actual results to differ materially from any forward-looking statements contained in this press release is contained in the Company's 10K and Quarterly Report on Form 10Q for the quarter ended September 30, 2001 on file with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.
Pegasystems (NASDAQ: PEGA) develops strategic applications for marketing, sales, service, and operations. Pega’s applications streamline critical business operations, connect enterprises to their customers seamlessly in real-time across channels, and adapt to meet rapidly changing requirements. Pega’s Global 3000 customers include many of the world’s most sophisticated and successful enterprises. Pega’s applications, available in the cloud or on-premises, are built on its unified Pega 7 platform, which uses visual tools to easily extend and change applications to meet clients’ strategic business needs. Pega’s clients report that Pega gives them the fastest time to value, extremely rapid deployment, efficient re-use, and global scale. For more information, please visit us at www.pega.com.
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The information contained in this press release is not a commitment, promise, or legal obligation to deliver any material, code or functionality. The development, release and timing of any features or functionality described remains at the sole discretion of Pegasystems, Pegasystems specifically disclaims any liability with respect to this information.
Lisa Pintchman Rogers
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