Comnet, Group 1 Make Plans to Merge
The merger probably will be approved by shareholders at the shareholders' meetings of both companies, which are scheduled for this fall.
Group 1, a provider of direct marketing and mailing software, was developed within Comnet in 1981, and currently Comnet owns 81.2 percent of the outstanding stock of Group 1. The companies entered into negotiations to merge in December. According to Group 1, the decision was based on the fact that it would quell market confusion.
"Basically, Comnet and Group are filing two different quarterly and annual reports, for example, and there is just not much difference between the two," said Karen Dickerson-Deppe, a spokeswoman for Group 1. "The merger will eliminate confusion because people don't recognize Comnet or associate it with Group 1."
If the agreement is approved, Comnet common stock will be issued to Group 1's minority shareholders in exchange for their Group 1 common stock. In addition, the surviving company will be renamed Group 1 Software Inc. No change in the business directions or operating management of Group 1 are expected as a result of the merger.
Group 1 reported record revenues of $61 million for the year ended March 31 compared with $54.5 million for the previous year. Net earnings for the year were $1.4 million compared with a net loss of $1.6 million for the previous year.