Combination Brings Together Industry-Leading Solutions for Synchronous Learning
WASHINGTON – July 8, 2010 – Blackboard Inc. (NASDAQ: BBBB) today announced that it has entered into definitive agreements to acquire both Elluminate, Inc. and Wimba, Inc., two of the leading providers of synchronous learning and collaboration technology to the education markets, for a total of approximately $116 million in cash, excluding transaction costs and subject to certain adjustments.
These leading teams and solutions together will form Blackboard Collaborate, the newest standalone platform in the Company’s family of education solutions. Blackboard, combined with the teams from Elluminate and Wimba, will pursue greater innovation to meet growing needs in the area of synchronous learning and collaboration, including continued support for integrations with open source applications and other commercial learning management systems (LMS).
Elluminate and Wimba offer advanced virtual classroom technology that allows education institutions to hold synchronous live courses over the Web, including audio, video, white board and social learning capabilities. The technologies are used to supplement traditional courses, to support full distance learning courses, and to facilitate a variety of other collaborative interactions including virtual office hours, team meetings, professional development, student projects and mentoring and tutoring opportunities.
“We’ve heard directly from our clients that this technology has become increasingly fundamental to the learning process for the online course experience and beyond,” said Michael L. Chasen, Blackboard President and CEO. “Collaboration technology is joining the range of solutions that our clients are leveraging to support and improve the teaching and learning experience. We expect this will grow as institutions look for cost-effective ways to encourage social learning and support learning interactions of all kinds.”
Leading Providers of Synchronous Learning and Collaboration Software in Education Combine to Establish Blackboard Collaborate
Together, Elluminate and Wimba serve more than 2,600 institutions in the U.S. K-12, U.S. higher education, international and professional education markets.
“Bringing Elluminate and Wimba together allows us to accelerate development of their technologies to better realize the full potential for impacting education – at a rate much faster than any of our organizations could have achieved independently,” said Ray Henderson, President of Blackboard Learn who will set the technology strategy and provide leadership to the combined team. “I’m confident in our ability to maintain positive experiences for clients and learners in all contexts, regardless of which learning management system is used. We will continue to support Elluminate and Wimba integrations for open source products and plan to do the same for bridges with other commercial LMS providers as well.”
•Elluminate, headquartered in Calgary, Alberta, was founded in 2000 and employs approximately 140 professional staff serving more than 1,900 K-12 and higher education clients located throughout the U.S. and 80 other countries.
•Wimba, headquartered in New York, NY, was founded in 1998 and employs approximately 100 professional staff serving more than 700 K-12 and higher education clients located throughout the U.S. and 27 other countries.
Financial Details of the Elluminate and Wimba Acquisitions
Both Elluminate and Wimba’s business models include annual subscription and perpetual offerings. The companies’ subscription models offer many of the same financial characteristics as Blackboard's, including an annual recurring subscription-based licensing model, ratable revenue recognition, a stable institutional client base and strong renewal rates. As a result, the combination is expected to enhance growth and profitability over time.
Blackboard management currently expects that the combined Elluminate and Wimba transactions will contribute approximately $6.0 million to Blackboard’s full year 2010 GAAP revenue, assuming the anticipated early August closing date for the acquisitions. At the time of the acquisition announcement the combined companies had a contract value[1] of approximately $27 million. The Company expects the acquisition to be dilutive to full year 2010 by approximately ($0.33) to GAAP net income per diluted share and by approximately ($0.25) to non-GAAP net income per diluted share. Management estimates that there will be approximately ($0.14) of dilution in full year 2010 to non-GAAP net income per diluted share primarily related to the purchase accounting adjustments to Elluminate and Wimba’s deferred revenue and approximately ($0.04) of additional dilution in full year 2010 to non-GAAP net income per diluted share related to the timing of non-recurring integration costs.
Blackboard expects the transaction to be accretive in 2011 by approximately $0.05 to full year earnings on a pro forma non-GAAP net income per diluted share adjusted basis excluding the impact of purchase accounting adjustments on deferred revenue and non-recurring merger-related costs. The Company expects the acquisitions to contribute approximately $30.0 million to Blackboard’s full year 2011 GAAP revenue and the Company also expects the acquisition to be dilutive to full year 2011 by approximately ($0.25) to GAAP net income per diluted share and by approximately ($0.05) to non-GAAP net income per diluted share.
Safe Harbor Statement
Any statements in this press release about future expectations, plans and prospects for Blackboard and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “will,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the factors discussed in the “Risk Factors” section of our Form 10-Q filed on May 7, 2010 with the SEC. In addition, the forward-looking statements included in this press release represent the Company’s views as of July 8, 2010. The Company anticipates that subsequent events and developments will cause the Company’s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to July 8, 2010.
