Press Release
October 2, 2000
NEW YORK, NY -- AremisSoft Corporation (Nasdaq:AREM) a leading international supplier of enterprise-wide software
and Internet-enabled solutions for the manufacturing, hospitality, healthcare and construction industries, Friday
announced the signing of an agreement to acquire assets and assume liabilities of Atlanta-based Eltrax' lodging
and international hospitality business (Eltrax hospitality), a leading supplier of property management systems
to the hospitality industry, for $10 million in cash.
AremisSoft plans immediate integration of the two companies. Eltrax hospitality is a division of Eltrax Systems,
Inc. (Nasdaq: ELTX), a full service application services provider.
With this acquisition, AremisSoft becomes the world's second-largest vendor of hospitality systems, with more than
3100 customers and a revenue run rate of approximately $50 million in hospitality products and services. AremisSoft
anticipates that the acquired business will have 2000 revenue of approximately $20 million, including $10 million
of annual maintenance revenue. The acquisition expands AremisSoft's customer base, market coverage, and sales presence
in the US and other key markets. The acquisition brings to AremisSoft approximately 1600 property management system
customers throughout the world and business relationships with major hotel groups, including Bass Hotels &
Resorts (Holiday Inns), Choice Hotels International, Fairmont Hotels, Accor, Hawthorne Suites, and Kimpton Hotels
and Suites.
"The Eltrax hospitality acquisition marks a huge step forward for AremisSoft as we continue to leverage our
array of technologies, knowledge of the hospitality market, and development resources to become a dominant force
in the market," stated AremisSoft's founder, Chairman and CTO, Dr. Lycourgos Kyprianou. "We want to provide
our customers with totally integrated enterprise solutions that incorporate e-business initiatives so they can
benefit from the Internet. Our development resources in India are unequalled in the hospitality industry.
"We plan to bring together the best of AREMIS Hotel and Eltrax hospitality's new Windows-based Medallion(TM)
product. AremisSoft will not abandon Eltrax hospitality customers and products, including Medallion(TM). As a world
leader in application rejuvenation, we will be examining product and technology strategies that could lead to enhancement
options for our customers while continuing to provide maintenance and support."
AremisSoft expects the acquisition to be slightly accretive to 2000 pro forma earnings per share. The Company projects
that the acquisition will add $0.05 to $0.10 to pro forma earnings per share in 2001 before amortization of intangibles.
AremisSoft anticipates assigning approximately $8.5 million of the purchase price to goodwill and other intangible
assets. The goodwill and other intangible assets are expected to be amortized over a period of three years, equal
to a non-cash charge of approximately $2.8 million per year. Closing of the transaction is conditioned upon the
consent of Eltrax' lenders and other conditions.
AremisSoft President and CEO Roys Poyiadjis commented, "This acquisition dramatically expands our presence
in the US. We are looking forward to working with the approximately 210 Eltrax hospitality people in the US and
throughout the world. We were attracted to Eltrax hospitality by their well-established worldwide sales infrastructure
and highly effective support facility in Wichita, Kansas, which can provide the cornerstone for further expansion
in the US. We have been working closely with these organizations for the past several months, developing a plan
targeted at delivering value to customers and shareholders. We are encouraged that the whole Eltrax hospitality
management team is excited about the opportunities presented by AremisSoft.
"The market for hospitality systems has changed dramatically during the past year as major groups have shifted
spending to Internet and other projects. We see many of the new Windows based property management systems experiencing
growing pains. These circumstances have created a unique opportunity to maximize the market reach of our powerful
technology base and proven applications. We are already delivering a next generation Windows based property management
system to the market along with a highly configurable central reservation system and data warehouse. We can now
bring these market leading capabilities to a wider audience through Eltrax hospitality and save 1-2 years in market
development effort.
"As hotels look to their vendors for technology to create business value, AremisSoft has many of the components
to create a powerful next generation enterprise wide solution, including:
"AremisSoft's position as a strong enterprise application systems supplier, coupled with the Eltrax hospitality
acquisition, will give us the opportunity to acquire additional hospitality software companies at favorable valuations,"
stated Paul Bloom, Executive Vice President of Corporate Development. "Software development resources are
getting increasingly hard to find and retain in the US. With the worldwide base of operations we have established
by combining Eltrax hospitality with our organization, we are in an excellent position to accelerate our consolidation
activity."
About Eltrax hospitality
Eltrax hospitality group, headquartered in Atlanta, Georgia is a leading supplier of hospitality information systems
worldwide. Eltrax hospitality has approximately 210 employees and sales offices throughout the US, Europe, and
Asia/Pacific with major support centers in Wichita Kansas, Brussels Belgium, Sydney Australia, Beijing China, and
Singapore. Eltrax hospitality has approximately 1600 property management system customers and over 2400 total customers.
Key customers include Bass Hotels & Resorts (Holiday Inns), Choice Hotels International, Fairmont Hotels, Accor,
Hawthorne Suites, and Kimpton Hotels and Suites. Major products include legacy systems LANmark(R), Performer(TM),
the new Windows based Medallion Property Management System, and the InnDemand(R) Internet ASP Property Management
Solution.
About AremisSoft Corporation
AremisSoft develops, markets, implements and supports enterprise-wide applications software targeted at mid-sized
organizations in the manufacturing, healthcare, hospitality and construction industries. The Company's software
products help streamline and enhance an organization's ability to manage and execute mission-critical functions
such as accounting, purchasing, manufacturing, customer service and sales and marketing. AremisSoft reported total
revenue of $73.4 million for the twelve months ended December 31, 1999 and net income of $12.1 million before extraordinary
gains for the same period. AremisSoft has over 500 employees, with sales in 10 countries and a customer base in
excess of 4,500. The Company also operates a software development and support facility in India, with over 200
employees, which provides significant organizational efficiencies and cost advantages in software development and
support.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation
Reform Act of 1995: All statements, other than historical facts, included in the foregoing press release regarding
the Company's financial position, business strategy, and plans of management for future operations are "forward-looking
statements." These statements are based on management's beliefs and assumptions, and on information currently
available to management.
Forward looking statements include, but are not limited to, statements in which words such as "expect,"
"see," "anticipate," "intend," "plan," "believe," "estimate,"
"consider," or similar expressions are used. Forward-looking statements are not guarantees of future
performance. They involve risks, uncertainties, and assumptions, including risks discussed under "Risk Factors"
in the Company's annual report on Form 10-K, SEC File No. 0-25713, all of which are incorporated herein by reference.
The Company's actual results and stockholder values may differ materially from those anticipated or expressed in
these forward looking statements. Many of the factors that will determine these results and values are beyond the
Company's ability to control or predict. Readers of this press release are cautioned not to put undue reliance
on any forward-looking statement. The Company undertakes no obligation to publicly update these forward-looking
statements, whether as a result of new information, future events or otherwise.
Notice of Conference Call:
Management of AremisSoft will be hosting a conference call to discuss the acquisition of Eltrax' hospitality group
on Friday, September 29, 2000 at 9:00 a.m. EST. To participate in the call, international callers can dial 415.537.1845.
Callers from the United States and Canada can dial 888.343.7139. A replay of the call is available through Tuesday,
October 3, 2000 and can be accessed by dialing 858.812.6440, passcode: 16509857. The conference call will also
be available via the Internet by accessing the AremisSoft web site at www.aremissoft.com.
Follow the directions on the main page to link to the Broadcast.com audio. Please go to the web site at least fifteen
minutes prior to the call to register, download and install any necessary audio software.
CONTACT:
Paul Bloom
Executive Vice President of Corporate Development
AremisSoft Corporation
856-869-0770
paul.bloom@aremissoft.com
or
Morgen-Walke Associates
Michele Katz/Stephanie Prince/Cathy Dawson
Press: Brian Maddox
212-850-5600