Blackbaud Agrees To Buy Software Firm Convio For $16 A Share

(RTTNews.com) - Blackbaud, Inc. (BLKB), a provider of software and related services designed for nonprofit organizations, on Tuesday said that it has agreed to acquire Convio, Inc. (CNVO) for $16 per share. The deal is expected to close during the first quarter of 2012. Convio shares climbed around 48 percent in pre-market activity on the Nasdaq.

The per share deal price represents a premium of 49 percent compared to Convio's recent closing price. The deal has an enterprise value of approximately $275 million, the company noted.

Both companies' board of directors have unanimously approved the transaction, which is structured as a cash tender offer followed by a merger. All Convio directors and officers and certain of its affiliates, holding over 30 percent of company's stake in total, have agreed to tender their shares.

Convio is a provider of on-demand constituent engagement solutions that enable nonprofit organizations to more effectively raise funds, advocate for change and cultivate relationships. Convio has over 1,500 customers in the U.S., Canada and the U.K., including 29 of the top 50 U.S. charities.

The transaction is expected to be accretive to Blackbaud's non-GAAP financial results for the full year 2012 and increasingly so in future years.

Blackbaud said it will finance the deal through a combination of existing cash balance, and debt. After closing the acquisition, the combined company is expected to have net debt of approximately $240 million.

Following the deal closure, Gene Austin, Convio's President and CEO, will take on a leadership role at Blackbaud, reporting to Blackbaud's President and CEO Marc Chardon.

Blackbaud noted that the acquisition of Convio will combine both companies' strengths to provide a comprehensive and compelling set of multi-channel supporter engagement solutions to nonprofit organizations of all sizes. Convio's strength in online and social is a perfect complement to Blackbaud's expertise, and its addition will enable Blackbaud to better serve nonprofit organizations, the company said in its statement.

The company noted that the pro forma combined company revenues for the trailing twelve months ended September 30, 2011 was $440 million, adjusted EBITDA was $94.9 million.

Tony Boor, Blackbaud's Senior Vice President and Chief Financial Officer, stated, "In addition to the strategic reasons supporting the acquisition of Convio, we believe it is also highly attractive from a financial perspective. We expect the transaction to have an accretive impact on our non-GAAP diluted earnings per share for the full year 2012, and even more so in future years as we realize efficiencies from integrating our companies. The addition of Convio will also significantly increase the size of Blackbaud's subscription revenue and further strengthen our SaaS and transactional offerings."

For the transaction, BofA Merrill Lynch is acting as the exclusive financial advisor to Blackbaud. JPMorgan Chase Bank, N.A., SunTrust Bank and BofA Merrill Lynch are providing financing.

Stifel, Nicolaus & Company, Incorporated is acting as the exclusive financial advisor to Convio.

BLKB closed Friday's trading at $29.21, down $0.55 or 1.85 percent.

CNVO shares are currently trading at $15.89, up $5.15 or 47.95 percent in pre-market activity.

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