SPINNAKER TO ACQUIRE POWER UP SOFTWARE; DEAL WILL CREATE INDUSTRY'S LARGEST CONSUMER PRODUCTIVITY SOFTWARE COMPANY
CAMBRIDGE, Mass., Feb. 24 /PRNewswire/ -- Spinnaker Software Corporation (NASDAQ: SPKR) today announced that the company signed a letter of intent to acquire Power Up Software Corporation, a $34 million supplier of desktop publishing and personal organizational software based in San Mateo, Calif., for cash and warrants to purchase Spinnaker stock. The acquisition, expected to be completed in early spring, will make Spinnaker one of the industry's largest consumer productivity software companies with total revenues of about $65 million. The newly combined company will gain additional market strength from the acquisition through the addition of a line of best-selling products, the ability to reach millions of new customers directly via Power Up's highly successful catalog and the addition of several important OEM partners currently bundling Power Up products. Financing and additional working capital for the transaction will be provided by a Boston-based affiliate of Harvard Management Company, a major stockholder in Spinnaker. Terms have not been finalized. "These two companies belong together," said C. David Seuss, chairman and chief executive officer, Spinnaker. "We both develop quality products for the consumer that are value-priced and easy to learn and use. The acquisition creates a consumer software company with an extensive product line of winning titles, multiple distribution channels, strong brand names and the scale needed to compete in a global software industry. "Spinnaker and Power Up have both grown to become two successful $30 million productivity software companies targeting the same customers," said Edward Lauing, chairman, Power Up Software. "With this merger, we are creating the number one consumer productivity software company in the world." "This deal couldn't have happened without the commitment and support from Harvard Management," Seuss added. "The financing for this acquisition is further evidence of their belief in our corporate strategy."
New Products/New Avenues of Sales
Spinnaker will add Power Up's Calendar Creator Plus with an installed base of more than 1 million users; Express Publisher, desktop publishing software, winner of the Publisher's-Reader's Choice Award for 1992 and recognized by PC/Computing Magazine as one of the 200 Best PC Products of 1992; and Address Book Plus and Labels Unlimited, value added personal organizational software solutions. These products join Spinnaker's full line of PFS: software for small business/home office users and value-priced Easy Working product line. Power Up products will be marketed within Spinnaker's well- established channel of 15,000 retail locations including software stores, mass merchandisers, superstores and office supply stores. In turn, PFS: products will be marketed directly to end users through the Power Up catalog. More than eight million Power Up catalogs are mailed each year. The Power Up Catalog won the American Catalog Gold Medal Award in 1992. Spinnaker will add another 800,000 end users to the Power Up catalog mailing list. The acquisition strengthens Spinnaker's offerings for important OEM partners. Power Up has bundling relationships with IBM, Tandy and Apple Computer. Spinnaker supplies software to OEM partners including Compaq, Dell, Zenith, Philips/Magnavox and NEC. Partnering with OEMs allows Spinnaker to introduce its products to new computer users and builds an installed base from which to sell new products. The combination also strengthens Spinnaker's ability to market products to the international consumer productivity customer where mass marketing opportunities are beginning to emerge. With the broad line of PFS: and Power Up products, Spinnaker is well positioned to take advantage of these new opportunities.
Seuss will serve as chief executive officer of the newly combined company, which will be based in Cambridge, Mass. The Power Up Catalog and personal organization product development activities will remain in California. It is expected that much lower operating costs will be realized through the consolidation or elimination of duplicate functions. Lauing will join Spinnaker's board of directors when the acquisition is completed.
The New Software Company of the 90s
According to Seuss, the Power Up acquisition, in many ways, further positions Spinnaker as the prototypical software company of the future. "A software company can no longer survive on one shrink-wrapped solution targeted for corporate users which cost hundreds of dollars per user," said Seuss. "To succeed in the future, a software company must have the ability to sell extensive product lines to a broad consumer base using marketing strategies such as mass distribution, low pricing and branding. The successful software company of the future will have to have a low cost position in all aspects of the business and it will have to have a global orientation. With this acquisition, Spinnaker becomes a company with all of these capabilities." Spinnaker's PFS: product family includes PFS:WindowWorks 2.0, and integrated package that includes a word processor, a spreadsheet, database, terminal connectivity, a chart maker, and address book and label maker. Spinnaker has sold more than 1.6 million copies of PFS:WindowWorks to date. Other members of the PFS:Family include PFS:Write; PFS:Publisher; PFS:First Choice, another integrated package designed for business productivity, PFS:ResumePro Resume Writing and Job Search package; PFS:Prospect and PFS:Business Plan. Spinnaker's Easy Working line of value-priced applications for Windows provide low-cost, easy-to-use software solutions for less than $50. Based in Cambridge, Spinnaker Software is a leading supplier of complete value-added software solutions that are easy to learn and use. The company reported revenues of $30.017 million in fiscal 1992. -0- 2/24/93 ---- NOTE: PFS: and Easy Working are registered trademarks of Spinnaker Software Corp. Power Up is a trademark of Power Up Software. ExpressPublisher, Calendar Creator Plus, Address Book Plus and Labels Unlimited are trademarks of Power Up Software. Windows is a registered trademark of Microsoft. /CONTACT: Dan Chmielewski of Spinnaker Software, 617-494-1200/
CO: Spinnaker Software, Power Up Software ST: Massachusetts IN: CPR SU: TNM
DJ -- NE001 -- 9740 02/24/93 08:26 EST
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|Date:||Feb 24, 1993|
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