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TeleTech Extends into Channel Management

Looking to build out its database and e-commerce management capabilities, TeleTech Tuesday snapped up Newgen Results Corp. for approximately $200 million in stock.

TeleTech will acquire Newgen for stock in a tax-free exchange valued at $18 per share for Newgen's 10.5 million common outstanding shares. The transaction is expected to close in the fourth quarter of 2000.

A leader in e-commerce customer management solutions (eCRM), TeleTech will be able to bundle Newgen's enterprise channel management offering into its own product suite.

Newgen's strength is providing B2B enterprise channel management services to automobile dealers and manufacturers nationwide. The firm's products service the gamut of business players: distributors, dealers, retailers, original equipment manufacturers, resellers, service centers and contractors.

TeleTech hopes to apply eCRM applications and direct marketing, to its own key industry segments -- such as telecommunications, financial services, transportation, technology and healthcare.

Scott Thompson, TeleTech chief executive officer and president, said his firm's indirect channel will continue to be a dominant force for revenue generation and eCRM.

"Whether a company chooses to go to market with a direct or indirect channel strategy, TeleTech now has a complete eCRM solution to offer," Thompson said. This is a sizeable revenue generating opportunity for us, which is expected to significantly contribute to the company's growth rate."

In a conference call Tuesday, Jerry Benowitz, Newgen's chairman, president and chief executive officer, said the deal was advantageous to Newgen because it would help the firm go global.

"Our product line will benefit from the reservations we will be able to fill; we'll be able to offload volumes to other TeleTech centers," Benowitz said.

"This deal not only increases our chance for success in the marketplace, but Newgen has a lot of hidden value that may be immediately accretive to almost any company that could leverage the opportunity. TeleTech fits this bill for expansion globally."

Newgen will operate as an independent entity within TeleTech Companies Group, led by Michael Foss, chief financial officer and president, TeleTech Companies Group. Benowitz and his management will continue operating Newgen.

Since its inception in 1982, TeleTech has grown to operate 15,300 customer interaction center workstations and employs 19,300 people in nine countries. TeleTech's revenues for the second quarter 2000 increased to a record $181.8 million, up 51 percent from $120.6 million in the second quarter 1999.

Newgen, which chalked up revenues at $39.8 million through the first half of 2000, currently supports over 5,000 auto dealerships nationwide and maintains relationships with leading automotive companies and dealers groups including Audi, BMW and Ford, among others.