Keane Inc. to acquire SignalTree Solutions

NEW DELHI: Keane Inc. has announced that it has signed a definitive merger

agreement to acquire SignalTree Solutions Holding Inc., a privately-held

US-based corporation with two software development facilities in India and

additional operations in the United States.

Approximately 400 of SignalTree's 750 employees are located in India. Under

the terms of the merger agreement, Keane will pay cash for all of SignalTree's

outstanding stock. The enterprise value of the transaction is approximately $62

million, or 1.2 times SignalTree's 2001 revenues, which were approximately $50

million. The acquisition is subject to customary closing conditions, including

regulatory approvals, and is anticipated to close during the first quarter of

2002. The transaction is expected to be neutral to Keane's 2002 earnings and

accretive in 2003.

"Many of our customers have expressed a desire to capitalize on the

economic and quality advantages of offshore delivery in their applications

portfolio strategies," explained Brian Keane, president and CEO of Keane.

"At the same time, however, they are indicating a strong preference to gain

access to offshore capabilities through a local IT partner to lower risk and

maximize flexibility. With the addition of SignalTree, Keane's customers can now

move work offshore at their own pace, while maintaining the option to transfer

work back to a local delivery solution."

"The addition of SignalTree's proven offshore capabilities and

world-class processes will greatly enhance Keane's value proposition and the

leadership position of our application outsourcing solution," Brian Keane

went on to explain. "We can now offer customers the flexibility and

economic advantage of a seamless client service model, which includes on-site,

off-site, near-shore, and offshore delivery, with consistent processes,

management disciplines and metrics."