Pitney Bowes Inc. signed a definitive agreement yesterday to acquire all outstanding shares of Group 1 Software Inc., Lanham, MD, for $321 million.
Pitney Bowes, Stamford, CT, expects to pay for the acquisition with cash. Subject to approval by Group 1 stockholders and other conditions, the transaction is to close in the third quarter.
Pitney Bowes is a $4.6 billion global provider of integrated mail and document management solutions serving more than 2 million businesses in 130 countries.
Group 1 Software began providing postal and direct mail software in 1982 and currently provides technologies that let businesses cleanse and enrich corporate data, generate personalized customer communications and integrate and deliver data across the enterprise. Group 1 offers solutions for financial services, banking, retail, telecommunications, utilities, insurance and other industries.
Group 1 has 600 employees worldwide with sales offices in the United States, Canada, Japan, South Korea, Singapore, Malaysia, China and Europe.
Group 1 will become a wholly owned subsidiary of Pitney Bowes within its Global Enterprise Solutions segment. It will continue to operate under its current management.
Pitney Bowes chairman/CEO Michael J. Critelli said the company would eliminate redundancies over time. However, he said, retention agreements are in place with key executives at Group 1.
Software is an increasingly important part of Pitney Bowes' value proposition for mailers, and Group 1 “has a broad range of address management, data quality, document generation and delivery and marketing campaign management software applications,” Critelli said. “While we have mailing software capability today in areas such as data quality, this acquisition allows us to buy an enhancement to that capability, much more quickly and cost-effectively than we could if we built it ourselves.”
Critelli also said that the acquisition supports Pitney Bowes' major growth strategies.
“Beyond the enhancement of our existing software business, Group 1 will help us expand our presence in the mail stream in several ways,” he said. “It will strengthen our ability to leverage some of the recent initiatives that the postal service is undergoing in intelligent mail and data quality.”
It also will “grow our value to the direct mail market and add 3,000 mid- and high-volume mailers to our customer base,” he said.
Critelli said that Group 1 would help Pitney Bowes expand its document management presence by “providing us with a foundation for expanding our customer communication management capabilities.” This, he said, will help large enterprises link the information contained within mail and documents across customer touch points and business processes.
“We've sized the market at approximately $4 billion, and Group 1 gives us a platform to strengthen our ability to leverage this opportunity,” he said.
