Vistaprint Agrees to Acquire Webs Inc. for $117.5 Million

VENLO, THE NETHERLANDS/SILVER SPRING, MD—Dec. 19, 2011—Vistaprint N.V. and Webs Inc., the do-it-yourself suite of Websites, Facebook pages and mobile presence solutions for small businesses, announced the companies have entered into a definitive agreement in which Vistaprint will acquire Webs for $117.5 million payable at closing. The company‘s revenues for the calendar year 2011 are forecast to be approximately $9 million.

Webs has served more than 40 million customers globally since its inception in 2001, with millions of active users and 100,000+ paying subscribers. More than 20,000 new users register daily for Webs’ suite of products. The company currently monetizes its offerings primarily by providing premium products for which customers pay subscription charges. Webs is based in Maryland and employs approximately 50 full-time employees.

“Webs’ suite of products delivers incredible value to micro businesses, helping them to look professional online in order to grow their business,” said Robert Keane, CEO of Vistaprint. “Vistaprint is already successfully delivering digital marketing services to our customer base, with hundreds of thousands of active registered customers and over $50 million in digital subscription revenues last fiscal year. Webs complements this success with a business model based primarily on free products that has achieved impressive customer reach. They are serving millions of users who are exactly the types of micro businesses that Vistaprint targets.

“The value of this transaction lies primarily in three areas: an increased ability to serve customers via the integration of physical and digital small business identity and marketing, the addition of impressive talent who have an innovative and customer-centric approach to product development, and plans to monetize our mutual customer bases over the long-term via the sale of physical products and premium digital marketing subscriptions,” Keane added.

Vistaprint has been at the forefront of providing affordable, customized identity and marketing products to micro businesses for over a decade and its iconic free business card offer has been instrumental in driving its growth. Webs’ free website and free custom Facebook Page offerings have created a similar customer acquisition dynamic in digital marketing services.

This acquisition combines Vistaprint’s strengths in marketing, geographic reach, service operations, manufacturing, and capabilities development with Webs’ agile approach to product development that delivers innovative, customer-focused online marketing solutions.

“We are thrilled about joining the Vistaprint family, as the synergies between our two companies could not be more clear,” said Webs CEO Haroon Mokhtarzada. “Our companies share a common vision for the future of micro business marketing, and bring complementary products and competencies to the table.

“We believe Webs will flourish as a part of Vistaprint, providing significant value to both our customers and our employees. Together, we imagine a future in which a micro business will market itself through seamlessly integrated digital and physical marketing media with significant cross-over potential. The business opportunity for us as the market continues to evolve is incredibly compelling and exciting,” Mokhtarzada continued.

Webs’ innovative digital marketing solutions are:

• Webs.com—the do-it-yourself solution to create a free website. Webs enables micro businesses and entrepreneurs to easily design a great looking, mobile-optimized website to project a professional image at no cost. Premium upgrades include personalized domain names, customer support, email addresses, and enhanced web and video storage.

• Pagemodo.com— a tool for small businesses to quickly design and publish an eye-catching business Facebook Page for free, without any design or technical skills. Pagemodo provides a wide variety of customizable templates with easy-to-add paid features like videos, contact forms, and maps, plus powerful social media tools like fan coupons and “like” gates. Since Pagemodo’s launch in 2010, over 615,000 small businesses have signed up to publish custom Facebook pages that reach over 10 million Facebook users per month.

• ContactMe.com—the first online, lightweight customer relationship management (CRM) tool created exclusively for micro businesses. ContactMe helps busy entrepreneurs consolidate and manage their contacts, track customer relationships, attract more leads, and save valuable time.

Subject to satisfaction of customary closing conditions, Vistaprint will acquire Webs for approximately $100.0 million in cash and $17.5 million in restricted shares subject to continued employment of the founding shareholders. In addition, Webs management and employees will join the Vistaprint team, and will continue to operate under the Webs brands. The transaction is expected to be completed within one month, and the consideration is subject to customary closing adjustments.

Vistaprint expects this transaction to be dilutive to its GAAP earnings per share through fiscal 2014 due to the expectation that we will incur significant costs for amortization of acquisition-related intangible assets, tax charges related to the alignment of intellectual property with global operations, and the treatment of the restricted share portion of the consideration as compensation expense. Vistaprint expects this transaction to be dilutive to non-GAAP earnings per share in fiscal 2012 and 2013, but accretive to non-GAAP earnings per share in fiscal 2014. Non-GAAP earnings per share excludes share based compensation, amortization of acquisition-related intangibles, and tax charges related to the alignment of intellectual property with global operations. Vistaprint will provide updated detailed guidance with its second quarter fiscal 2012 earnings announcement in January, subject to the transaction close.

Vistaprint has posted additional information about the transaction, including a presentation with our preliminary estimates for the financial impact of this transaction, on the Investor Relations section of its website at ir.vistaprint.com. At 8:30 a.m. ET today the company will host a live Q&A conference call with management, which will be available via web cast on the Investor Relations section of www.vistaprint.com and via dial-in at (866) 783-2138, access code 17051872. A replay of the Q&A session will be available on the company’s website following the call on December 19, 2011.

About Vistaprint
Vistaprint N.V. (Nasdaq:VPRT) empowers more than 11 million micro businesses and consumers annually with affordable, professional options to make an impression. With a unique business model supported by proprietary technologies, high-volume production facilities, and direct marketing expertise, Vistaprint offers a wide variety of products and services that micro businesses can use to expand their business. A global company, Vistaprint employs over 3,100 people, operates 25 localized websites globally and ships to more than 130 countries around the world.

About Webs
Webs Inc. is the world’s most popular do-it-yourself solution to create a free website, having served over 40 million users. Webs enables small businesses and entrepreneurs to easily make a great-looking website and project a professional image. The Webs family of products—including Webs, ContactMe, and Pagemodo—provide small businesses with simple and cost-effective ways to launch and grow their companies across web, social, and mobile platforms. Founded in 2001 by the Mokhtarzada brothers, Webs is funded by Novak Biddle Venture Partners and Columbia Capital.

Source: Vistaprint.