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ATG Makes Case for Primus Acquisition

Art Technology Group (ATG) is urging shareholders to approve the acquisition of Primus Knowledge Solutions, saying the merger will create an "e-business powerhouse."

Stockholders from each company will vote on the $30 million transaction in meetings Oct. 22. If approved, Primus shareholders will own approximately 30 percent of the combined company.

The proposed deal would combine "ATG's strength in online sales and marketing with Primus' strength in customer service software," Bob Burke, ATG's president and CEO, said in a letter to shareholders.

Product lines will be integrated in phases, with most of the work completed by the middle of next year. The companies' applications are built on the same standards, so engineers don't anticipate too much difficulty in the project.

And because only a handful of Primus' 225 enterprise customers are also ATG customers, the merged company the opportunity to cross-sell and up-sell.

Burke also highlighted financial benefits of the merger.

When ATG announced the offer last month, it estimated the combined company could save between $10 million to $15 million a year on IT, real estate and staffing. But after additional planning of the integration, ATG has bumped the range to $15 million to $17 million.

An ATG spokesman was not immediately available to offer further details on the merger plan.

The acquisition is supported by the board of directors and management teams of both companies. And industry watchers have been expecting consolidation in the customer service and support industry, because large corporate customers are looking for one-stop shopping.

In his letter to shareholders, ATG's Burke cited several reports from research groups including Gartner and the Patricia Seybold Group to buttress its argument.