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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(RULE 14D-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION
14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
MERCATOR SOFTWARE, INC.
(Name of Subject Company)
MERCATOR SOFTWARE, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
587587106
(CUSIP Number of Class of Securities)
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ROY C. KING
CHAIRMAN, CHIEF EXECUTIVE OFFICER AND PRESIDENT
MERCATOR SOFTWARE, INC.
45 DANBURY ROAD
WILTON, CT 06897
TELEPHONE: (203) 761-8600
(Name, address and telephone number of person authorized to receive
notice and communication on behalf of the person(s) filing statement)
Copy to:
MICHAEL WEINSIER, ESQ.
CHARLES A. SAMUELSON, ESQ.
JENKENS & GILCHRIST PARKER CHAPIN LLP
405 LEXINGTON AVENUE
NEW YORK, NY 10174
TELEPHONE: (212) 704-6000
|X| Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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ASCENTIAL - MERCATOR
Messaging Document
August 2003
"The Enterprise Data Integration Leader"
SECTION I: KEY POINTS AND MESSAGES SUMMARY..................................................4
SECTION II: ADDITIONAL INFORMATION ON KEY POINTS............................................6
GROWTH-ORIENTED ACQUISITION SIGNIFICANTLY EXPANDS ASCENTIAL'S SIZE AND SCALE 6
EXTENDS ASCENTIAL'S ENTERPRISE DATA INTEGRATION LEADERSHIP 8
DELIVERS SIGNIFICANT VALUE AND BENEFITS TO OUR CUSTOMERS AND PARTNERS 10
PROVIDES FINANCIAL LEVERAGE AND BENEFITS 13
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Copyright (C) Ascential Software Corporation, 2003 Page 3
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SECTION I: KEY POINTS AND MESSAGE OVERVIEW
1. GROWTH-ORIENTED ACQUISITION SIGNIFICANTLY EXPANDS ASCENTIAL'S SIZE AND
SCALE
o The combined company becomes the largest independent enterprise
data integration software company with $250 million in annualized
revenue and more than 3,000 customers worldwide
o Mercator and Ascential products and services are complementary
and create the potential for significant cross-sell opportunities
resulting in new revenue streams generated from the companies'
complementary products, channels and geographic presence
o Larger combined global sales, services and support operations
create a foundation for accelerate revenue growth
o Partners can benefit from product set's expanded capabilities and
significant value-add; Expanded ecosystem broadens company's
market reach
o Elevates the visibility and strategic importance of the combined
company within the enterprise IT community
2. THE COMBINATION OF MERCATOR AND ASCENTIAL EXTENDS OUR ENTERPRISE DATA
INTEGRATION LEADERSHIP
o Creates the industry's first and most comprehensive product set
to support the full spectrum of transactional, operational, and
analytical data integration requirements, regardless of data
volumes or latency
o Significant accumulation of talent, with deep domain expertise,
provides extensive resources for technology innovation, customer
value and global reach
o Single-vendor solution for enterprise data integration software,
services and support designed to reduce customers' time-to-value
and protect investments
o Designed to complement customer's existing business intelligence
(BI), business process integration (BPI), enterprise application
integration (EAI), enterprise information integration (EII) and
Business Intelligence (BI) investments with the benefits of
anytime, in-flight data integration capabilities
o Supports our strategic vision of evolving our product set
capabilities into a unified Enterprise Data Integration platform
easily deployed as a set of service-oriented data integration
services
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3. DELIVERS SIGNIFICANT VALUE AND BENEFITS TO OUR CUSTOMERS AND PARTNERS
o Mercator customers can benefit from Ascential Software's
infinitely scalable suite of data profiling, data quality,
transformation and meta data management products
o Ascential customers can benefit from Mercator's vertical industry
standard adaptors, industry-ready solutions, transaction-oriented
data transformation and routing capabilities, and technology and
vertical market domain expertise
o The combined company's customers can benefit from superior value
and ROI through:
|X| Reduced risk, cost and complexity from a single-vendor,
single-solution approach that supports the full
spectrum of transactional, operational, and analytical
data integration requirements
|X| Continued stream of innovative new products resulting
from the accumulation of talent and resources from a
strategic vendor with long-term staying power and R&D
investment capacity
|X| Ability to deploy large scale mission critical data
integration solutions backed by expanded global sales,
service and support operations
4. PROVIDES FINANCIAL LEVERAGE AND BENEFITS
o Expected to be accretive within the first year of operations, by
leveraging:
|X| Increased sales, services and marketing capacity and
experience
|X| Expanded R & D staff, scope and experience
|X| Revenue synergies - cross selling and new revenue
streams
|X| Cost synergies from overlapping functions, mostly
administrative in nature, facilities and programs
o Expected to accelerate achievement of long term operating margin
goals
o Substantial financial resources remain following the acquisition
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SECTION II: ADDITIONAL INFORMATION ON KEY POINTS
1. GROWTH-ORIENTED ACQUISITION SIGNIFICANTLY EXPANDS ASCENTIAL'S SIZE AND
SCALE
|X| THE COMBINED COMPANY BECOMES THE LARGEST INDEPENDENT ENTERPRISE DATA
INTEGRATION SOFTWARE COMPANY WITH $250 MILLION IN ANNUALIZED REVENUE
AND MORE THAN 3,000 CUSTOMERS WORLDWIDE
This is a strategic, growth-oriented acquisition, which combines two
companies with complementary products/technologies, distribution
channels, strategic alliances, and geographic presence. The
combination is not about consolidation; rather it provides a unique
opportunity to combine the technology, people, customers, and partners
of both companies into a single company to create the largest
independent enterprise data integration software company - with
annualized revenue of approximately $250 million and over 3,000
customers and over 900 employees globally.
o MERCATOR AND ASCENTIAL PRODUCTS AND SERVICES ARE COMPLEMENTARY AND
CREATE THE POTENTIAL FOR SIGNIFICANT CROSS-SELL OPPORTUNITIES
RESULTING IN NEW REVENUE STREAMS GENERATED FROM THE COMPANIES'
COMPLEMENTARY PRODUCTS, CHANNELS AND GEOGRAPHIC PRESENCE
By addressing the complete breadth of enterprise data integration
requirements, the combined company garners significant cross-selling
opportunities and the potential for new revenue streams resulting from
the company's complementary data integration capabilities, services,
channels, strategic alliances, and geographic coverage.
Mercator's data integration offerings, which are designed to transform
and route data in transactional environments are a perfect complement
to Ascential's established data integration offerings primarily
deployed in analytical and data warehousing environments. As a result,
the combined company is uniquely positioned to address the complete
spectrum of high performance data integration challenges commonplace
in enterprise-scale IT environments.
A typical enterprise has multiple data integration requirements across
their entire IT infrastructure, and they are looking to utilize a
smaller number of strategic vendors to better leverage their internal
skill sets and software investments. This presents an enormous
opportunity for the combined to cross-sell it's expanded offerings to
it's 3,000+ customers, and provides a significant competitive
advantage when competing in situations where prospects are seeking to
standardize on a single-vendor, single solution for their complete
enterprise data integration requirements.
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Ascential-Mercator FAQ Document August 4, 2003
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o LARGER COMBINED GLOBAL SALES, SERVICES AND SUPPORT OPERATIONS HELP
ACCELERATE REVENUE GROWTH
o Increase in size of sales force expands geographic and account
coverage expected to create greater visibility into new IT
projects and business opportunities
o Expanded product set addresses a broader spectrum of data
integration requirements increasing the potential for account
penetration and sales opportunities
o Expanded global services operation, with deep domain expertise in
technology and vertical markets, expected to enhance support for
enterprise-scale project implementations
o PARTNERS BENEFIT FROM PRODUCT SET'S EXPANDED CAPABILITIES AND SIGNIFICANT
VALUE-ADD: EXPANDED ECOSYSTEM BROADENS COMPANY'S MARKET REACH
Both companies are focused on growing partner-influenced and embedded
license revenue, and this will continue to be a vital component of
Ascential's strategy. Mercator's 2002 partner influenced license revenue
grew to 46%, from 27% in 2001. Ascential's Q2 2003 partner influenced
license revenue was approximately 50%.
The combined company's strategic partnerships include technology vendors
such as IBM, BEA, HP, SAP, Lawson Software, Oracle, PeopleSoft, Microsoft,
Business Objects, Hyperion, Cognos and Sun Microsystems; and systems
integrators such as Accenture, BearingPoint, Cap Gemini, Deloitte
Consulting, EDS, CSC, and IBM Business Consulting. This acquisition is
expected to strengthen Ascential's relationships with all of these
partners, especially Ascential's partnership with the IBM Software Group
and their broad spectrum of complementary on-demand integration
capabilities.
Our combined company enables a more comprehensive and complete solution on
top of our product set and integrates with other integration and business
intelligence offerings as part of a partner's end-to-end offering.
We are committed to supporting its partners with the companies' combined
offerings and an explicit focus on partner-oriented sales, marketing,
training and support.
o ELEVATES THE VISIBILITY AND STRATEGIC IMPORTANCE OF THE COMBINED
COMPANY WITHIN THE ENTERPRISE IT COMMUNITY
o Significant industry transaction likely to generate significant
business and industry press, financial analyst, and industry
analyst coverage
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o Increased impact from additional marketing resources on company
image and awareness
o Expanded sales and services operation drives increased customer
and prospect coverage and interaction
o Industry leader status anticipated to provide greater levels of
awareness and interest in news and opinion communicated by
company
2. THE COMBINATION OF MERCATOR AND ASCENTIAL EXTENDS OUR ENTERPRISE DATA
INTEGRATION LEADERSHIP
o CREATES THE INDUSTRY'S FIRST AND MOST COMPREHENSIVE PRODUCT SET TO SUPPORT
THE FULL SPECTRUM OF TRANSACTIONAL, OPERATIONAL, AND ANALYTICAL DATA
INTEGRATION REQUIREMENTS, REGARDLESS OF DATA VOLUMES OR LATENCY
Ascential's expanded enterprise data integration capabilities now
encompass:
o Unlimited scalability
o Meta Data Driven Lifecycle
o National Language Support (NLS)
o Technology standards - EDI, Web Services, XML, J2EE, JMS, Java,
J2C
o Industry standards - HIPAA, SWIFT, ACORD
o Open, extensible and flexible Service-oriented Architecture (SOA)
o Intelligent and Reusable Data Transformation and Routing
o Anytime, Anywhere Enterprise Data Integration - such as IMS,
Siebel, CICS, SAP
o Multi-source Data Profiling and Data Quality Standardization,
Matching and Linking
o Vertical Industry-ready and standards-based (EDI, SWIFT, HIPAA)
data integration offerings for finance, healthcare, retail,
manufacturing and distribution
o Interoperability with enterprise application (EAI) and business
process integration (BPI) solutions from IBM, BEA, SeeBeyond,
WebMethods and TIBCO among others
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o Open data integration solutions to existing or future customer
investments in enterprise application, business intelligence
tools, and systems platforms
o SIGNIFICANT ACCUMULATION OF TALENT, WITH DEEP DOMAIN EXPERTISE, PROVIDES
EXTENSIVE RESOURCES FOR TECHNOLOGY INNOVATION, CUSTOMER VALUE AND GLOBAL
REACH
o SINGLE-VENDOR SOLUTION FOR ENTERPRISE DATA INTEGRATION SOFTWARE, SERVICES
AND SUPPORT REDUCES CUSTOMER'S TIME-TO-VALUE, AND PROTECTS INVESTMENTS
o Reduce risk and complexity associated with "integrating the
integration tools" common with a multi-vendor solution approach
o Streamlines problem identification and resolution due to
single-vendor approach
o Reduced contract administration costs for customers and partners
o Complements customer's existing business intelligence (BI)
business process integration (BPI), enterprise application
integration (EAI), and enterprise information integration (EII)
with the benefits of anytime, in-flight data integration
capabilities
o Seamless integration of products through standards such as
Enterprise Java Beans (EJB), Java Messaging Service (JMS) and Web
Services
o Enables the sharing and reuse data transformation logic across
all integration technologies primarily for optimum consistency
and accuracy of critical business information
o SUPPORTS OUR STRATEGIC VISION OF EVOLVING ITS PRODUCT SET CAPABILITIES INTO
A UNIFIED ENTERPRISE DATA INTEGRATION PLATFORM EASILY DEPLOYED AS A SET OF
SERVICE-ORIENTED DATA INTEGRATION SERVICES
o Ascential plans to continue to protect customer's investment in
Mercator's technologies and as a result of the expanded resources
from this combination, will accelerate the continued enrichment
of its offerings into a unified Enterprise Data Integration
platform easily deployed as a set of service-oriented data
integration services
o Track record of successfully integrating acquired technologies
and talent with internal development. This leads to optimum
time-to-market with a premium
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on quality, innovation and maximizing customer value through
depth of functionality combined with broader solution scope
3. DELIVERS SIGNIFICANT VALUE AND BENEFITS TO OUR CUSTOMERS AND PARTNERS
o MERCATOR CUSTOMERS SHOULD BENEFIT FROM ASCENTIAL SOFTWARE'S INFINITELY
SCALABLE SUITE OF DATA PROFILING, DATA QUALITY, TRANSFORMATION AND META
DATA MANAGEMENT, DESIGNED TO:
o Enable greater business visibility by augmenting historical with
transactional data sources in real-time to provide reliable,
consistent, and actionable information across the enterprise
o Create the most accurate and reliable consolidated reference data
containing the corporation's single version of the truth that
synchronizes key customer, product, or supplier information
across all business systems and partner interactions
o Enhance customer service experience by reducing the percentage of
incomplete processes through embedded and systematic in-flight
data transformation, validation and standardization to ensure
accurate and complete data entry experience
o Designed for on-the-fly data access and re-purposing for use by
portals and contemporary real-time applications, and processes,
without labor intensive and fragile, hand coded application and
legacy data source integration containing complex cross-silo
relationships
o ASCENTIAL CUSTOMERS SHOULD BENEFIT FROM MERCATOR'S INDUSTRY STANDARD
ADAPTORS, INDUSTRY-READY SOLUTIONS, TRANSACTION-ORIENTED DATA
TRANSFORMATION AND ROUTING CAPABILITIES, AND TECHNOLOGIES AND VERTICAL
MARKET DOMAIN EXPERTISE
o Transparency between multiple exchange formats and protocols
prevalent in legacy mainframe and Electronic Data Interchange
(EDI) sources and contemporary XML-based data exchange standards
o Enabling exchange of data in real-time between front and
back-office systems triggered by application (or external) events
and repurposed using complex transformations and conditional
routing among dissimilar applications, protocols and platforms
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o Seamless Financial Services solutions that facilitate the flow of
risk-bearing transactions between banks, securities firms, and
other financial service providers, delivering comprehensive
straight through processing that reduces risk and increases
operational efficiencies
o Streamline Healthcare adjudication and supports eHealth
initiatives, enabling healthcare organizations to leverage
tactical compliance into long-term strategic advantage
o Retail, Distribution and Manufacturing solutions help
manufacturers, retailers, and distributors meet the business
demands associated with supply chain responsiveness and
flexibility, as well as collaboration within and between
organizations
o ALL CUSTOMERS SHOULD BENEFIT FROM SUPERIOR VALUE AND ROI THROUGH:
o Reduced risk, cost and complexity from a single-vendor,
single-solution approach that supports the full spectrum of
transactional, operational, and analytical data integration
requirements
The combined company's complementary cross platform capabilities
reduce the on-going time and expense of piecing together, and
maintaining, different vendor's technologies to achieve the same
solution
o CONTINUED STREAM OF INNOVATIVE NEW PRODUCTS RESULTING FROM THE
ACCUMULATION OF TALENT AND RESOURCES FROM A STRATEGIC VENDOR WITH
LONG-TERM STAYING POWER AND R&D INVESTMENT CAPACITY
o Combined company possesses deep domain expertise in
large scale, design, development, and deployment of
mission-critical data integration solutions
o Leverage unique skills in real-time systems, parallel
processing architectures, enterprise applications,
business intelligence and data warehousing
o Track record of successfully integrating acquired
technologies and talent with internal development. This
leads to improved time-to-market with premium on
quality, innovation and maximizing customer value
through the depth of functionality combined with
broader scope
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o ABILITY TO DEPLOY LARGE SCALE MISSION CRITICAL DATA INTEGRATION SOLUTIONS
BACKED BY EXPANDED GLOBAL SALES, SERVICE AND SUPPORT OPERATIONS
o Expands size and scale of combined customer-facing operations
o Leverage from cross-training increases resources available to
assist in customer problem identification and resolution
o Shared best practices and knowledge base improves customer
experience, customer service and improves Ascential's product
development
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4. PROVIDES FINANCIAL LEVERAGE AND BENEFITS
o Currently expected to be accretive within the first year of operations, by
leveraging:
o Increased sales, services and marketing capacity and experience
o Larger sales force and broader product offering enable
Ascential to expand its customer reach
o Increase marketing and services "share of voice" and brand
recognition
o Expanded R & D staff, scope and experience
o Significant accumulation of talent and domain expertise results in
confirmed product differentiation and consequently drives growth
potential
o Revenue synergies
o Significant cross-selling opportunities and value-add in
combined customer base
o Added capability in five key vertical industries: finance,
healthcare, retail, manufacturing and distribution
o Expected cost synergies from overlapping functions, mostly
administrative in nature, facilities and programs
o Expected acceleration of achievement of long term target operating
margin goals
o Substantial financial resources remain following the acquisition
This document contains forward-looking statements, as well as a number of
assumptions about future events and are subject to important factors and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. The forward-looking statements in
this document address a variety of subjects including, for example, benefits of
the proposed transaction; expected synergies attained through the combination;
revenues and earnings expected following the acquisition; the ability to retain
customers and maintain revenue streams; cross-selling opportunities; revenue
growth; market reach and leadership; visibility and strategic importance of the
combined company; expected financial leverage and benefits; partner influenced
license revenue; the ability of Ascential Software to retain substantial
financial resources; customer and partner reaction to the combination and
benefits to customers and partners; focus on partner-oriented sales, marketing,
training and support; generation of significant business and press and analyst
coverage; impact from additional marketing; the creation of a product set that
will support the full spectrum of data integration requirements regardless of
data volumes or latency; extension and deepening of Ascential Software's
resources, visibility and strategic importance of Ascential Software within the
enterprise IT community; the functionality, characteristics, quality and
performance capabilities of each company's products and technology; results
achievable and benefits attainable through deployment of each company's
products; customer requirements and expectations; and return on IT investment.
The following factors, among others, could cause actual results to differ
materially from those described in these forward-looking statements: the
acquisition may not be completed; the closing of the acquisition may be delayed;
required regulatory approvals may not be granted; shareholders may not tender
their shares or vote in favor of a merger; the businesses may not be
successfully integrated or the transition may require substantial time; the
integration may involve unexpected costs; both businesses may suffer as a result
of uncertainty surrounding the transaction; key employees may
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depart the company following the acquisition; customers of each business may not
adopt technology of the other business; as well as other factors, such as, the
ability of Ascential Software to expand its market share; growth rates for the
enterprise data integration software market; general business conditions in the
software industry, the technology sector, and in the domestic and international
economies; rapid technological change in the markets served by Ascential
Software; dependence on international operations; global and geopolitical
instability; and difficulties that Ascential Software may experience integrating
technologies, operations and personnel of completed or future acquisitions. For
a detailed discussion of these and other cautionary statements, please refer to
the filings made by Ascential Software with the Securities and Exchange
Commission, including, without limitation, the most recent Quarterly Report on
Form 10-Q. Ascential Software disclaims any intent or obligation to update any
forward-looking statements made herein to reflect any change in Ascential
Software's expectations with regard thereto or any change in events, conditions,
or circumstances on which such statements are based.
If a tender offer is commenced, any Offer to Purchase will be sent to all
Mercator stockholders. This document will contain important information and
should be read by stockholders. A tender offer statement on Schedule TO, which
will include the Offer to Purchase and other exhibits, will be filed with the
Securities and Exchange Commission. All documents filed with the SEC can be
examined for free at the SEC web site (HTTP://WWW.SEC.GOV.). They are also
available without charge by calling the Investor Relations department at
508.366.3888 or by sending a written request to that department at Investor
Relations, Ascential Software Corporation, 50 Washington Street, Westborough,
Massachusetts 01581.
(C) 2003 Ascential Software Corporation. All rights reserved. Ascential is a
trademark of Ascential Software Corporation or its affiliates and may be
registered in the United States or other jurisdictions. Other marks are the
property of the owners of those marks.
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