AlphaSmart, Inc. to Merge With Renaissance Learning(R), Inc.: Companies Positioned to Provide Breakthrough Solutions for Writing
January 25 2005 - 7:30AM
PR Newswire (US)
AlphaSmart, Inc. to Merge With Renaissance Learning(R), Inc.:
Companies Positioned to Provide Breakthrough Solutions for Writing
LOS GATOS, Calif., Jan. 25 /PRNewswire-FirstCall/ -- AlphaSmart,
Inc. (NASDAQ:ALSM), a provider of affordable, portable personal
learning solutions for the K-12 classroom, today announced that it
has reached a definitive agreement to merge with Renaissance
Learning, Inc. (NASDAQ:RLRN), a leading provider of learning
information systems and school improvement programs for pre-K-12
schools. AlphaSmart and Renaissance Learning expect that this
merger will enable the combined companies to offer a unique suite
of writing products, enhance some of Renaissance Learning's other
software products and broaden the market channels for the
AlphaSmart product lines. Renaissance Learning plans to operate
AlphaSmart as a wholly-owned subsidiary and retain the AlphaSmart
brand. Under the agreement, unanimously approved by the boards of
directors of both companies, each AlphaSmart stockholder will
receive $3.75 per share. The transaction is intended to be
structured as a tax-free reorganization and is valued at
approximately $57 million. AlphaSmart stockholders will have the
option to be paid in cash, stock or some combination of the two,
subject to pro-ration so that the total consideration paid will
aggregate no more than 45% stock and no less than 55% cash. The
merger, which is expected to be completed in the second quarter of
2005, is subject to approval by AlphaSmart stockholders, government
regulatory review, and other customary closing conditions described
in the definitive agreement. Voting agreements supporting the
merger have been executed by AlphaSmart stockholders who hold
approximately 60% of the outstanding shares, including its three
founders. "The addition of AlphaSmart's exceptional product line
and talented professional staff will strengthen and diversify
Renaissance Learning's position as a leading provider of learning
information systems to schools," said John Hickey, president and
chief executive officer of Renaissance Learning. "Together, we will
be able to provide unique breakthrough solutions to help educators
develop student writing skills along with strengthening other
Renaissance solutions where limited computer access is a bottleneck
to daily program use. In addition to the merger providing
substantial growth potential for the combined companies, we expect
to achieve annual savings of at least $1 million from the reduction
of redundant public company and other costs." "By offering
AlphaSmart portable computer-companion products with Renaissance
Learning software, we will be able to help K-12 districts leverage
the use of their existing classroom computers, thereby increasing
the value derived from their technology investment," said Ketan D.
Kothari, chairman and chief executive officer of AlphaSmart. "Our
solutions are highly complementary, and we expect that this merger
will help grow the revenues of the combined companies and
accelerate learning of writing and other subjects." AlphaSmart also
announced today that James M. Walker, vice president, chief
financial officer and chief operating officer, has been appointed
president and chief executive officer of Alara, Inc., a privately
held provider of Storage Phosphor Technology (SPT) imaging systems
for a variety of medical applications. Walker has served on Alara's
board of directors since the company's founding in 1994 and as
chairman of the board since 1996. In addition to his role at Alara,
Walker has indicated that he plans to continue serving as
AlphaSmart's vice president, chief financial officer and chief
operating officer until the close of the merger with Renaissance
Learning. Renaissance Learning will hold a brief conference call at
3:30 p.m. CST today to discuss the merger. The teleconference may
be accessed by dialing 888-868-9083 at 3:30 p.m. CST. Please call a
few minutes before the scheduled start time to ensure a proper
connection. A digital recording of the conference call will be made
available from January 25, 2005 at 8:00 p.m. CST through February
1, 2005 at 11:59 p.m. CST. The replay dial-in is 877-519-4471. The
conference ID number to access the replay is 5635124. AlphaSmart,
Inc. AlphaSmart, Inc. is a provider of affordable, portable
personal learning solutions for the K-12 classroom. Its portable
computer-companion products are used by students to enhance
writing, keyboarding and comprehension, and have been adopted by
more than 8,000 school districts in the United States and other
countries. Based in Los Gatos, California, the company was founded
in 1992 by former Apple Computer engineers. Renaissance
Learning(R), Inc. Renaissance Learning, Inc. is a leading provider
of research-based learning information systems software, school
improvement programs, teacher training, and consulting. Adopted by
more than 67,000 schools, Renaissance Learning information
technology products give students and teachers continuous
constructive feedback that helps motivate students, dramatically
accelerate learning, improve test scores, and help students master
all standards, while reducing teacher paperwork. Renaissance
Learning has six U.S. locations and subsidiaries in Australia,
Canada, India, and the United Kingdom. This press release contains
forward-looking statements made pursuant to the safe harbor
provision of the Private Securities Litigation Reform Act of 1995,
including statements regarding the expected impact the merger will
have on the combined companies. Any such forward-looking statements
may involve risks and uncertainties that could cause actual results
to differ materially from any future results encompassed within the
forward-looking statements. Factors that could cause or contribute
to such differences include the risk that AlphaSmart's business may
not be integrated successfully; failure to satisfy the closing
conditions; an unexpected increase in the costs related to the
merger; unexpected delays in closing the merger; and other risks
affecting AlphaSmart's and Renaissance Learning's businesses
described in their respective filings with the Securities and
Exchange Commission, including AlphaSmart's 2004 Quarterly Reports
on Form 10-Q, and Renaissance Learning's 2003 Annual Report on Form
10-K and later filed Quarterly Reports on Form 10-Q, which factors
are incorporated herein by reference. AlphaSmart and Renaissance
Learning expressly disclaim a duty to provide updates to
forward-looking statements, whether as a result of new information,
future events or other occurrences. Additional Information
AlphaSmart and Renaissance Learning intend to file a registration
statement on Form S-4, which will include a proxy
statement/prospectus and other relevant materials in connection
with the proposed merger transaction involving AlphaSmart and
Renaissance Learning. INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ THIS FILING WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER TRANSACTION.
Investors and security holders may obtain free copies of these
documents and other documents filed with the SEC when they become
available at the SEC's website at http://www.sec.gov/. In addition,
investors and security holders may obtain free copies of the
documents filed with the SEC by AlphaSmart at AlphaSmart's website
at http://www.alphasmart.com/ or by contacting AlphaSmart investor
relations at or via telephone at 408-355-1029. Investors and
security holders may obtain free copies of the documents filed with
the SEC by Renaissance Learning by directing such requests to
Renaissance Learning, Inc., Attention: Corporate Secretary, 2911
Peach Street, P.O. Box 8036, Wisconsin Rapids, Wisconsin 54995 or
via telephone at 715-424-3636. Renaissance Learning, AlphaSmart and
their respective directors and executive officers may be deemed to
be participants in the solicitation of proxies from the
stockholders of AlphaSmart in connection with the merger
transaction. Information regarding directors and executive officers
of AlphaSmart and Renaissance Learning and their respective
interests in the proposed transaction will be available in the
proxy statement/prospectus of AlphaSmart and Renaissance Learning
described above and other relevant materials to be filed with the
SEC. NOTE: AlphaSmart is a registered trademark of AlphaSmart, Inc.
in the United States and other countries. All other trademarks are
the property of their respective owners. DATASOURCE: AlphaSmart,
Inc. CONTACT: investors, Ketan D. Kothari, Chief Executive Officer
of AlphaSmart, Inc., +1-408-355-1029, or Web site:
http://www.alphasmart.com/
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