this appeared in my email today...
Nina Stephenson
Univ. of New Mexico
FOR IMMEDIATE RELEASE
January 24, 2003
RoweCom, Inc., doing business as RoweCom, Faxon or divine Information
Services, ("RoweCom") announced today the signing of a non-binding letter
of intent with EBSCO Industries, Inc. ("EBSCO"), the global leader for the
delivery of integrated information systems and services, for the proposed
purchase of the RoweCom world-wide subscription agent business (the
"Business"). The proposed transaction was also endorsed by the steering
committee of the ad-hoc group of publishers and library customers of
RoweCom. The committee, including the publisher members the American
Institute of Physics, the Association of Learned & Professional Society
Publishers, Elsevier, Oxford University Press and Wiley will endeavor to
expand the group of publishers supporting this transaction as they believe
the contemplated agreement is a significant step forward for customers and
publishers.
The proposed transaction is subject to due diligence and definitive
documentation, among other customary conditions to be satisfied prior to
completing the transaction, including regulatory approval and the like.
Additionally, the proposal will require publishers and libraries to work
with EBSCO regarding the fulfillment of prepaid RoweCom orders. The U.S.
transaction will be implemented through a chapter 11 bankruptcy filing of
RoweCom.
This announcement follows the December 20, 2002 press release by RoweCom's
parent company, divine inc. ("divine"), which indicated that divine had
decided to no longer support the Business. Since late December, there has
been considerable concern and uncertainty among RoweCom's customers and
publishers with respect to orders placed with RoweCom, most of which have
not been placed with publishers. However, a number of publishers had
agreed to grace RoweCom customers while investigations and negotiations
ensued over a possible restructuring of the RoweCom business.
What does this mean for RoweCom customers and publishers if the
transaction is completed?
For customers of RoweCom's European operations, all orders placed with
RoweCom will be fulfilled. The parties intend to execute definitive
purchase documents within ten days subject to French regulatory filings as
required by French law. divine has agreed to provide working capital
funding for RoweCom's European operations in the interim. Once the
transaction receives French regulatory approval and the transaction
closes, EBSCO will remit payment to publishers in full. Until that time,
EBSCO is asking publishers to continue to fulfill subscriptions. EBSCO has
already secured participation from the majority of the publishers, and is
optimistic the remaining publishers will agree, now that the situation
appears to be clarified.
For customers of RoweCom operations outside Europe (i.e.; U.S., Canada,
Australia, etc.), there are basically three situations:
1) For a customer who has paid RoweCom and RoweCom has forwarded
this payment on to the publishers, the customer will receive journals
from the publishers.
2) For a customer who has not paid RoweCom, the customer will
receive their journals once orders are confirmed to EBSCO. Upon
confirmation, EBSCO will make the appropriate payment to publishers.
3) For a customer who has paid RoweCom and RoweCom has not
forwarded this payment to the publishers, the customer will receive
journals from publishers who participate in this transaction.
RoweCom, EBSCO and the ad-hoc committee appreciate the continued
consideration and understanding of RoweCom's library customers during this
most difficult period.
RoweCom is a subsidiary of divine, inc. (NASDAQ: DVN). This press release
contains certain forward-looking statements with respect to RoweCom that
are subject to risks and uncertainties. For example, such risks and
uncertainties include the closing of the transactions summarized herein;
the ability of RoweCom to implement a restructuring plan to maximize the
amount realized for stakeholders; continued cooperation of RoweCom's
publishers; the availability of strategic alternatives for RoweCom; the
adequacy and availability of cash to operate its business; RoweCom's
ability to maintain sufficient cash flow and liquidity; the availability
and accessibility of financing at affordable levels for RoweCom and the
ability of RoweCom to tightly control expenditures. About EBSCO
Industries, Inc. EBSCO Industries, Inc. is a global corporation with
sales, service and manufacturing subsidiaries at work in 19 countries
around the world. EBSCO's business interests include information
management services, journal and periodical subscription services, real
estate development, commercial printing and more. EBSCO, an acronym for
Elton B. Stephens Company, is based in Birmingham, Alabama and employs
4,000 people around the world. Additional information on EBSCO Industries
is available from www.ebscoind.com.
For those interested in the ad-hoc creditors group, a list-serve
group has been set up on Yahoo at
http://groups.yahoo.com/group/rowecomcreditors.
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