Scient Corporation and iXL Enterprises are to merge, becoming subsidiaries of a new parent company headquartered in New York City and operating under the Scient name. Both boards have approved the transaction and approximately 34% of the shareholders of each company have agreed to vote their respective shares in favor of the merger.
In the transaction, each share of iXL and Scient common stock outstanding immediately prior to the effective time of the merger will be converted into the right to receive 0.25 and 0.31 of a share, respectively, of new holding company's common stock.
The transaction is expected to be accounted for as a purchase and is intended to be a non-taxable transaction to iXL's and Scient's shareholders. The deal is expected to close in the fourth quarter of 2001.
The combined company will have a veteran leadership team:
• Bob Howe, chairman and CEO of Scient, will become chairman
• Bert Ellis, chairman of iXL, will become vice-chairman
• Chris Formant, CEO of iXL, will assume the role of CEO
• Stephen Mucchetti, COO of Scient, will become COO, and
• Mike Casey, CFO of IXL, will assume the role of CFO.
Bert Ellis said: "This merger has overwhelming strategic advantages but the expected financial synergies are even more compelling. We have already targeted over $100 million of anticipated annual cost savings by combining our two companies.
"For example, had our two companies operated as a merged entity for the June 2001 quarter, we believe we would have reported, on a pro forma basis, approximately $3 million of positive EBITDA versus an aggregate EBITDA loss of $27 million. The synergies to be gained will enable the new Scient to achieve profitability."
Since 1998, Scient has completed projects for 165 clients, from Global 2000 businesses to start-ups. Headquartered in New York, Scient has offices in London and in key regions throughout the United States.
About iXL Enterprises
iXL customers include AIG, BellSouth, British Airways, Budget Rent a Car, Chase, Citicorp, The Coca-Cola Company, Delta Air Lines, DuPont, Eastman Chemical, FedEx, First Union, Fleet, GE and LloydsTSB.