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Hewitt Agrees to Buy Exult

June 17, 2004|From Bloomberg News

Hewitt Associates Inc., which provides human resources and consulting services, agreed Wednesday to buy Exult Inc. for about $6.30 a share in stock to offer clients a wider range of options.

Hewitt said it would pay 0.2 share of its stock for each Exult share. That is a 5.2% premium over Exult's closing price Tuesday of $5.99. The transaction values Irvine-based Exult at about $691.2 million, based on the 109.7 million Exult shares outstanding as of March 31.

Hewitt and Exult handle benefits, staffing and payroll services for 21 companies. Hewitt requires as long as 12 months to pick up those functions, while Exult, which uses the clients' systems, can begin much sooner, said Dale Gifford, Hewitt's chief executive.

With the addition of Exult, Hewitt expects fiscal 2005 revenue to be about $3 billion, an increase of 35% over its expected fiscal 2004 revenue.

Lincolnshire, Ill.-based Hewitt's shares fell $4.23 to $27.25 on the New York Stock Exchange. Exult fell 37 cents to $5.62 on Nasdaq.

The transaction, which is expected to close by Sept. 30, is subject to shareholder and regulatory approval.

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