November 12, 2002 03:41 AM | Press Release
BOSTON – Nov. 12, 2002 – Despite a prolonged slowdown in mergers and acquisitions activity, Covington Associates today announced its 16th transaction in the past 16 months, acting as financial advisor to TidalWire Inc. in its sale to Network Engines, Inc.(NASDAQ: NENG).
TidalWire is a privately-held specialist in the distribution and support of storage area network products. The company, based in Westboro, MA, was founded in 1996 and has about 30 employees. Network Engines is a publicly-held provider of enterprise server appliances and integration services. The cash/stock transaction which is expected to close at the end of the year or the beginning of next year, is valued at approximately $20 million.
“This is an example of two companies who knew they would be better off together but faced many challenges in making it happen,” said Eric Shealy, a partner who led Covington’s effort. “Although the transaction saw its share of obstacles, we worked hard to find mutually beneficial solutions that both parties could support..”
The TidalWire transaction is the latest in a series for Covington Associates, which specializes in M&A advisory services to healthcare and technology firms. The company has advised many rapidly growing companies including Horizon Medical, Inc., Visualization Technology, Inc., and Inverness Medical Technology, a manufacturer of products focused primarily ondiabetes self-management, which was acquired by Johnson & Johnson for $1.3 billion in November 2001.
When asked about Covington’s role in TidalWire’s acquisition, the company’s CEO Jeff Brandes commented, “Being able to rely on the team at Covington Associates to do the heavy lifting allowed me to not only get the deal done in a relatively short timeframe, but I was also able to focus on my business at the same time, increasing revenues by 84% during the course of the transaction.
For the fiscal year ended March 31, 2002, TidalWire had revenues of $25.2 million and operating income of about $850,000. For the six months ended Sept. 30, TidalWire had revenues of about $18.5 million and operating income of $900,000. The combined Network Engines-TidalWire company is expected to have approximately $40 million in cash.
About Covington Associates
Covington Associates are seasoned M&A advisors to technology and healthcare. Focused exclusively on Mergers and Acquisitions, Covington Associates has established a track record of success based on deep domain experience and an unrivaled level of service from a team of senior advisors. Since its founding in 1991, Covington Associates has successfully completed transactions ranging in value from $10 million to over $1 billion.
TIDALWIRE ACQUIRED BY NETWORK ENGINES