Attunity (ATTU) to Acquire Appfluent Technology in $18M Cash, Stock Deal

Attunity (NASDAQ: ATTU) has signed a definitive agreement to acquire Appfluent Technology, Inc., a U.S.-based leading provider of data usage analytics for Big Data environments, including data warehousing and Hadoop, for a total consideration of approximately $18.0 million, payable in cash and stock, with additional earn-out consideration based on performance milestones.

Through this acquisition, Attunity will be able to offer the industry's first product suite that analyzes Big Data usage patterns, and then moves large data volumes and processing workloads to Hadoop. Recent Industry analysts report that Hadoop can save 70% or more of data storage and processing costs compared to traditional data warehouses. Appfluent's solutions enable the efficient utilization of Hadoop, delivering a significant ROI to enterprises using Big Data. These savings can be in the order of millions of dollars annually for large enterprises.

Appfluent solutions have been selected by key partners and are positioned as part of their data warehouse optimization solution packages. These partners include the leading Hadoop vendors, Cloudera, Hortonworks and MapR, as well as Big Data solution providers such as Cisco and CapGemini. Combined with Attunity's data integration software, Attunity will be able to provide more strategic solutions and expand its value to these Big Data partners as well as to others.

"This acquisition aligns with our strategy to capitalize on the changing dynamics in the market due to the Big Data revolution, expanding our position as a leading provider of highly valuable and uniquely differentiated Big Data solutions," said Shimon Alon, Attunity's Chairman and CEO. "We also expect the acquisition of Appfluent to contribute directly to our revenue growth in 2015 as well as drive cross selling and bundling opportunities with customers and business partners across the entire Attunity product line. With data volumes growing so rapidly, it is critical for enterprises to accurately understand how Big Data is being used, and Appfluent provides a leading solution in the market to address this growing demand."

Mr. Alon added: "With the unique technology and market leading capabilities of Appfluent, we believe this acquisition will strengthen the demand for Attunity Big Data solutions and the awareness of the Attunity brand. Furthermore, we expect that it will enable us to expand opportunities with both existing and new partners. The respective products, partners and go-to-market strategies of the two companies are very complementary and well aligned, which will enable us to quickly turn this opportunity into a growth engine that enhances shareholder value. As we expand our platform and offerings, enterprises continue to rely on us as their trusted provider of solutions that facilitate and optimize their Big Data initiatives."

Frank Gelbart, founder and CEO of Appfluent, said: "We see tremendous synergy and are excited to join forces with the Attunity team. Put together, our solutions provide an answer to one of the most common needs that enterprises are trying to address with the modern Big Data technologies - when and how to leverage Hadoop. Our customers see significant advantages from having deep insight into their data usage patterns so they can strategically and intelligently decide where to store and process their data, including a significant reduction in their Big Data costs. Now, they will be able to see additional value by facilitating the process of moving data across platforms and offloading it from expensive ones with the Attunity suite of solutions. Leveraging our complementary solutions and our mutual success building partnerships, we will focus on becoming the strategic partner of choice to the leading vendors in the Big Data space."

The transaction, which is subject to customary closing conditions, is expected to close in the next couple of weeks.

Additional details regarding the proposed transaction are included in the Report on Form 6-K that the Company will furnish to the Securities and Exchange Commission (SEC) in the next few days.

Updated Revenue And Operating Margin Outlook

Appfluent is projected to generate approximately $7.0 million to $8.0 million over the 12 months following closing. This reflects strong growth attributable to increasing momentum in the business as well as access to Attunity's sales and marketing teams.

The Company has updated its outlook for 2015 to reflect the acquisition of Appfluent. The Company now expects total revenue to be between approximately $51 million and $54 million for 2015. Additionally, the Company now expects non-GAAP operating margin to range between 11% and 15%.

Financial Reconciliation to NON-GAAP figures for Updated 2014 Outlook:

   

                                                       From To

    GAAP Operating Profit Margin                       (1%)  4%

    Equity base compensation                             5%  4%

    Amortization and other adjustments - related

    acquisitions (*)                                     7%  7%

    Non-GAAP Operating Profit margin (**)               11% 15%

(*) Includes estimated amortization and other adjustments related to the proposed acquisition of Appfluent.

(**)Non GAAP Operating Profit Margin is calculated by dividing the Non GAAP Operating Profit by the total revenues for the period.

The Company does not expect to provide or update guidance more often than on an annual basis.

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