KANA Assets and Liabilities to be Acquired by Accel-KKR


Share on LinkedIn

Menlo Park, Calif. – October 27, 2009 — KANA Software, Inc.
(OTCBB: KANA.OB), a world leader in innovative
customer service

solutions, today announced that it has entered into a definitive agreement
with an affiliate of Accel-KKR, a technology-focused private equity firm,
which will buy substantially all of KANA’s assets and liabilities for a cash
purchase price to KANA of approximately $48.9 million (which represents an
enterprise value of $50.1 million), subject to adjustment based on closing
net working capital, net indebtedness, transaction expenses and other
adjustments described below. The transaction is subject to specified closing
conditions. After the transaction is completed, KANA’s current operating
business, which includes software, services and licensing, will operate as a
privately-held company under its current KANA brand. At that time, the OTC
Bulletin Board-listed entity will be renamed and will continue to be
publicly traded under a new trading symbol with the net cash proceeds from
the transaction and more than $400 million of net operating loss (NOLs)

The Board of Directors of KANA has unanimously approved the asset purchase
agreement and has recommended to the company’s stockholders that they adopt
and approve the agreement. In connection with the execution of the asset
purchase agreement, KANA Directors, officers and major shareholders have
signed voting agreements with Accel-KKR to vote approximately 22 percent of
the company’s outstanding shares in favor of the transaction.

“This is a transaction that brings optimal value to our shareholders, our
customers and our company,” said Michael S. Fields, KANA’s Chief Executive
Officer. “We intend to focus on completing this transaction promptly.”

The KANA Board of Directors issued the following statement: “With the
assistance of the company’s financial advisor, Pagemill Partners, the
company conducted a thorough process and received this proposal from
Accel-KKR. After extensive negotiations, careful due diligence and in-depth
consultation with our financial advisors, the Board has unanimously
concluded that this transaction is in the best interests of our

The renamed publicly traded company’s strategic plan will be to enhance
stockholder value by pursuing opportunities to acquire one or more
profitable businesses. The publicly traded company will not compete with the
privately held KANA. The public company believes that the current economic
and business environment, though challenging, should nevertheless allow it
to secure a business platform that provides growth opportunities and can
also utilize the NOLs.

In the event that the renamed public company has not invested at least half
of the proceeds of the asset sale within six months of closing the asset
sale, the company anticipates soliciting the vote of stockholders on a
proposal to continue seeking acquisition candidates; and if this proposal is
not approved by stockholders, the company intends to return at least half of
its cash to stockholders at that time, through a dividend, issuer tender
offer or other distribution. The company’s stockholder rights plan, which is
triggered if a stockholder acquires more than 4.9 percent of the company’s
outstanding stock, will remain in effect to protect the company’s ability to
utilize its NOLs.

“KANA is pleased that a world-class investor like Accel-KKR has such
confidence in the software business of this company,” continued Mr. Fields.
“We believe strongly that Accel-KKR’s financial strength and deep domain
expertise will be critical to enabling the privately held KANA to extend its
current technology leadership to global market leadership in our sector.”

Jason Klein, Managing Director at Accel-KKR said, “Accel-KKR is excited
about partnering with KANA’s management and employees to help the company
expand its existing position in the global multi-channel customer service
market. We look forward to investing in KANA and helping the company better
serve its customers in industries as diverse as retail, technology,
telecommunications, health care, insurance, financial services and the
public sector.”

The proposed transaction is expected to close within 90 days and is subject
to agreed-upon closing conditions, including the absence of any material
adverse change in the company’s business or results of operations prior to
closing and the receipt of certain consents from third parties. Further, the
transaction is subject to the approval of the asset purchase agreement by
holders of a majority of the outstanding shares of the company’s common
stock. The purchase price to be paid by Accel-KKR is subject to adjustments
based on the company’s net working capital at closing, its indebtedness (net
of its cash), and transaction expenses, and based on other matters. KANA
anticipates that, following adjustments that are currently expected, the
renamed public company will have cash at closing of between $40 million and
$44 million. However, the actual amount could be less, depending on the
company’s cash, debt and net working capital at closing, and final
transaction expenses. Certain proceeds may be held in escrow following
closing, pending resolution of certain specified contingencies.

Pagemill Partners served as financial advisor to the Board and rendered an
opinion as to the fairness, from a financial point of view, to the company’s
stockholders. Fenwick & West LLP is serving as legal counsel to the
company. Accel-KKR is advised by Kirkland & Ellis LLP.

Additional Information About the Proposed Transaction and Where You Can Find

In connection with the proposed transaction, KANA intends to file a proxy
statement and other relevant materials with the Securities and Exchange
THE PROPOSED TRANSACTION. The proxy statement and other relevant materials,
and any other documents filed by KANA with the SEC may be obtained free of
charge at the SEC’s website at www.sec.gov. In addition, stockholders of
KANA may obtain free copies of the documents filed with the SEC by
contacting KANA. Requests may be made by contacting KANA’s Investor
Relations at (650) 614-8160 or [email protected]. You may also read
and copy any reports, statements and other information filed by KANA with
the SEC at the SEC public reference room at 100 F Street, NE, Room 1580,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the
SEC’s website for further information on its public reference room.

KANA and its executive officers and directors may be deemed to be
participants in the solicitation of proxies from KANA stockholders in favor
of the proposed transaction. Certain executive officers and directors of
KANA have interests in the transaction that may differ from the interests of
stockholders generally, including without limitation acceleration of vesting
of stock options, benefits conferred under severance arrangements, and
continuation of director and officer insurance and indemnification. These
interests will be described in the proxy statement when it becomes

About KANA

KANA is a world leader in multi-channel customer service. KANA’s integrated
solutions allow companies to deliver consistent, managed service across all
channels, including email, chat, call centers and Web self-service, so
customers have the freedom to choose the service they want, how and when
they want it. KANA’s clients report double-digit increases in customer
satisfaction, while reducing call volumes by an average of 20 percent.
KANA’s award-winning solutions have been proven in more than 600 companies
worldwide, including approximately half of the world’s largest 100
companies. For more information, visit www.KANA.com.

About Accel-KKR

Accel-KKR is a technology-focused private equity firm with over $1 billion
in assets under management. The firm invests primarily in software and
IT-enabled businesses well positioned for top-line and bottom-line growth.
At the core of Accel-KKR’s investment strategy is a commitment to developing
strong partnerships with the management teams of its portfolio companies and
a focus on building value through the significant resources available
through the Accel-KKR network. Accel-KKR has a particular focus on
going-private transactions, divisional buyouts of larger companies and
buyouts and recapitalizations of family-owned or closely-held private
companies. For more information, please visit www.accel-kkr.com.

Cautionary Note Regarding Forward-looking Statements Under the Private
Securities Litigation Reform Act of 1995: Information in this release
regarding KANA’s forecasts, projections, expectations, beliefs, and
intentions are forward-looking statements that involve risks and
uncertainties. All forward-looking statements included in this release are
based upon information available to KANA as of the date of this release,
which will likely change and we assume no obligation to update any such
forward-looking statement. These statements include statements about
anticipated revenue growth, profitability, market leadership, demand for
KANA’s software, and customers’ expected benefits and results from KANA
applications. These statements are not guarantees of future performance and
actual results could differ materially from our current expectations.
Factors that could cause or contribute to such differences include, but are
not limited to: competition in our marketplace, including introductions of
new products or services, or reductions in prices, by competitors; risks
associated with lack of market acceptance of KANA’s products or services;
inability to enhance and develop our products and services within budget and
on schedule; inability to attract and retain qualified employees, to manage
cash and expenditures or to expand sales; KANA’s history of losses; the
effect of potential military action and terrorist activities; and slow
economic conditions, particularly as they affect spending by our prospective
customers on multi-channel customer service and similar enterprise software
products. These and other factors are risks associated with our business
that may affect our operating results and are discussed in KANA’s filings
with the Securities and Exchange Commission, including our most recent
annual report on Form 10-K and our quarterly reports on Form 10-Q.

NOTE: KANA is a registered trademark of KANA Software, Inc. All other
company and product names may be trademarks of their respective owners.

News Editor
CustomerThink offers a free news posting service for press releases relevant to our community. To submit your press release to our news editor, send an email to [email protected] with the press release headline and main content in the email subject line and body, respectively. That's it! Approved press releases will appear in our news category within one business day of submission.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here