Blackboard and WebCT Announce Agreement to Merge

The combined Companies' 3,700 academic clients will create an unparalleled

Community of Practice enabling collaboration and innovation around the world

Oct 12, 2005, 01:00 ET from Blackboard Inc.

    WASHINGTON, Oct. 12 /PRNewswire-FirstCall/ -- Two leading providers of
 enterprise software and services to the education community, Blackboard Inc.
 (Nasdaq:   BBBB) and WebCT, Inc., today announced a definitive agreement to
 merge.  Under terms of the agreement, Blackboard will acquire WebCT in a cash
 transaction for $180 million, which values the offer at approximately $154
 million, net of WebCT's August 31, 2005 cash balance of $26 million.  The
 ultimate value of the offer will vary depending on WebCT's cash balance at
 closing.  The transaction will combine two pioneering academic e-Learning
 organizations into a single company with the client base, resources and
 expertise to uniquely meet the rapidly evolving needs of educators around the
     The merger of Blackboard and WebCT marks a major milestone in the build-
 out of networked learning environments by colleges, universities, schools and
 other education providers.  It creates a large, collaborative community of
 academic institutions-a global e-Learning "Community of Practice"-supported by
 unsurpassed resources for innovation and support.  Currently, more than 3,700
 higher education, K-12, corporate, government and commercial academic
 institutions enhance their learning environments with solutions offered by the
 two organizations.  Bringing Blackboard and WebCT together provides a powerful
 platform for innovating and supporting what at many institutions is the least
 developed, yet one of the most strategic segments of their technology
 infrastructure.  Further, it will break down barriers and enable collaboration
 across institutions by developers and end-users at a critical time in the
 evolution of e-Learning technologies.
     "This merger makes tremendous sense for our clients, shareholders and
 employees.  It marks an unparalleled opportunity for two successful, mission-
 driven organizations to unify with a singular focus on being the premier
 partner and platform for educators on a global basis," said Michael Chasen,
 Blackboard President and Chief Executive Officer.  "Together with our clients,
 we have one of those rare and special opportunities to truly improve the
 access, quality and efficiency of education on a global scale."
     "Both companies are passionate about the academic market and, alongside
 our respective clients, have truly pioneered the category together," said
 Carol Vallone, WebCT President and Chief Executive Officer. "Given the
 alignment of our visions, technologies, and overall strategies, the
 combination of our two companies will advance the teaching and learning
 technology industry, benefiting customers worldwide."
     Both companies' Boards of Directors have approved the merger.  Subject to
 regulatory approval and other customary closing conditions, the transaction is
 expected to close late this year or in early 2006.  The combined companies
 will operate under the Blackboard name and brand with corporate headquarters
 located in Washington, DC.  Operations will continue in WebCT's facilities in
 Massachusetts and Canada.  Michael Chasen will continue to serve as President
 and CEO.
     Complementary Strengths and Synergies
     The merger of Blackboard and WebCT unites two innovators servicing
 academic institutions, both with complementary heritages in academia.  Key
 strengths of the combination include:
      * Top rated, proven e-Learning solutions recognized for ease-of-use,
        flexibility and scalability
      * A broad, unified platform for publishers and e-Learning software
        developers that spans the globe
      * A world-class service and support organization benefiting from the
        best-practices and infrastructure investments of both companies
      * A stronger presence in the global education markets, including an
        expanded international footprint, including the UK, Canada, Australia,
        Japan, South Africa, Finland, Netherlands, Singapore, Spain, Hong Kong
        and Ireland
      * Expanded base of Blackboard clients, allowing Blackboard to better
        serve those WebCT e-Learning institutions that also use the Blackboard
        Commerce Suite(TM) product set
      * Larger revenue streams, enabling greater investment for innovation
     Client Continuity and Product Strategy
     Blackboard plans to enhance and support the existing products of both
 WebCT and Blackboard.  New releases and ongoing software maintenance for WebCT
 and Blackboard will continue to be a key focus of the combined company.  At
 the same time, Blackboard will leverage the Blackboard Building Blocks(R)
 architecture and WebCT's PowerLinks framework as the joint foundation for
 these enabling interfaces that will allow the existing product lines to
 interoperate with one another and with other applications.  Over time,
 Blackboard will incorporate the best features and usability characteristics
 from the two product lines into a new, standards-based product set that will
 incorporate a scalable, architecture, the use of Web services, unparalleled
 ease of use, and flexible customization features.
     "I have had experience with both companies and view this merger as
 combining excellence with excellence to advance the e-Learning industry," said
 Jack Wilson, President of The University of Massachusetts.  "I also see this
 combination as a way to break down barriers across the Commonwealth of
 Massachusetts, and to open the door to new opportunities for collaboration
 among institutions using different e-learning platforms."
     Financial Details
     WebCT offers many of the same financial characteristics of Blackboard's
 business model, including an annual recurring subscription-based licensing
 model, ratable revenue recognition, a stable educational institutional client
 base and historically high renewal rates.  As a result, the combination is
 expected to enhance growth and profitability over time.  Blackboard expects
 the acquisition to close late this year or in early 2006.  Assuming the merger
 closes by early 2006, Blackboard expects the transaction to be moderately
 accretive to earnings on a non-GAAP basis and dilutive on a GAAP basis for
 calendar year 2006, and significantly accretive to earnings on a non-GAAP
 basis and dilutive on a GAAP basis for calendar year 2007.  The combined
 company expects to realize significant efficiencies by leveraging shared
 development infrastructure, and mitigating duplicative marketing initiatives
 and administrative expenditures.
     Blackboard retained Credit Suisse First Boston as its financial advisor
 and Wilmer Cutler Pickering Hale & Dorr and McDermott, Will & Emery as its
 legal advisors.  WebCT retained Goldman Sachs & Co. as its financial advisor
 and Choate, Hall & Stewart and White & Case as its legal advisors.
     Additional Information
     The Blackboard management team will host a financial analyst and investor
 conference call today at 5:00 p.m. EDT. The call can be accessed at (866) 578-
 5788 (U.S.) or (617) 213-8057 (International) and using the reference code
 56789081. The conference call will also be web cast at For those unable to listen to the live
 conference call, a telephone replay will be available at (888) 286-8010 or
 (617) 801-6888 (reference code 18422925), through October 19, 2005.
     Blackboard's CEO, Michael Chasen, and WebCT's CEO, Carol Vallone, will
 hold multiple meetings open to clients and other educators to discuss the
 merger and answer questions.  These meetings will take place at the Educause
 conference during each company's corporate presentations scheduled for
 Wednesday, October 19, 2005, 11:40 AM EDT in Meeting Room W204A and on
 Thursday, October 20, 2005, 2:20 PM EDT in Meeting Room W204A.
     In addition, Blackboard has launched a new portion of its Web site,, where anyone can track the latest news and
 information about the merger.
     About Blackboard
     Blackboard is a leading provider of enterprise software and services to
 the education industry. The Company's product line consists of five software
 applications bundled in two suites, the Blackboard Academic Suite(TM) and the
 Blackboard Commerce Suite.  Blackboard's clients include colleges,
 universities, schools and other education providers, as well as textbook
 publishers and student-focused merchants that serve education providers and
 their students. Blackboard is headquartered in Washington, D.C., with offices
 and staff in North America, Europe and Asia.
     About WebCT
     Based in Lynnfield, MA, WebCT provides a highly flexible e-learning
 environment that empowers institutions across the educational spectrum with
 the ability to achieve their unique objectives for faculty empowerment,
 administrative efficiency and student outcomes. Colleges and universities
 around the world, from community colleges to large university consortia, are
 using WebCT to expand the boundaries of teaching and learning.
     Forward Looking Statements
     Any statements in this press release about future expectations, plans and
 prospects for Blackboard and other statements containing the words "believes,"
 "anticipates," "plans," "expects," "will," and similar expressions, including
 statements about the expected impact of the acquisition on Blackboard's
 earnings per share in future periods, constitute forward-looking statements
 within the meaning of The Private Securities Litigation Reform Act of 1995.
 Actual results may differ materially from those indicated by such forward-
 looking statements as a result of various important factors, including the
 timing and extent of regulatory review, the timing of the closing, the ability
 of Blackboard to integrate the business, operations and personnel of WebCT
 following the acquisition, and the ability of both companies to retain their
 existing customers and gain new customers before and after the closing of the
 acquisition.  Other factors that could affect the results discussed in our
 forward-looking statements include those set forth in the "Risk Factors"
 section of our most recent 10-Q filed with the SEC. In addition, the forward-
 looking statements included in this press release represent the Company's
 views as of October 12, 2005. The Company anticipates that subsequent events
 and developments will cause the Company's views to change. However, while the
 Company may elect to update these forward-looking statements at some point in
 the future, the Company specifically disclaims any obligation to do so. These
 forward-looking statements should not be relied upon as representing the
 Company's views as of any date subsequent to October 12, 2005.

SOURCE Blackboard Inc.