Alterian buys Dynamics Direct

The initial consideration to be paid by Alterian on completion is $4.5m satisfied by the payment of $1.75m in cash and the issue of 1,257,042 new shares in Alterian. The cash element of the initial consideration will be satisfied out of Alterian's existing cash resources. An additional consideration of up to $1m, subject to the achievement of certain revenue targets by DDI for the period from completion to 31 March 2007, will be payable in cash.

Based in Los Angeles, DDI was recently ranked as one of the leading email marketing software providers by Jupiter Research (Email Marketing Buyer's Guide, 2005) and has a rapidly growing partner and customer base predominantly in the US that includes marketing services providers ("MSPs") such as Euro RSCG Worldwide and Vertis, and clients such as Princess Cruises, Countrywide Financial Services, and Marsh Affinity Insurance.

The transaction results in a powerful marketing services technology platform that merges DDI's permission-based email and online marketing with Alterian’s existing core database marketing operations. Alterian expects this offering to prove very attractive to its partners, having seen their demand for such solutions growing rapidly. DDI's flagship product, Dynamic Messenger, has already been integrated with the Alterian Marketing Suite and will be made immediately available to Alterian’s global partner base of over 70 MSPs. This is expected to accelerate penetration of our Partners' customer and prospect bases, increase average sale price, and provide access to a wider market of potential Partners.

For the year ended 31 December 2005, DDI generated turnover of $1.3m, and a profit before tax of $0.1m. As at 24 May 2006 DDI had gross assets of approximately $0.4m. The acquisition is expected to be earnings enhancing in the current financial year, and significantly earnings enhancing in the first full financial year post acquisition as sales of the DDI products benefit from Alterian's distribution arrangements.

All 8 employees of DDI will be joining Alterian and the existing management team will remain in place.

David Eldridge, Chief Executive Officer of Alterian, commented: "This is a very positive move for Alterian and our business Partners. With the growth in email and online marketing, marketers are increasingly demanding online and multi-channel marketing solutions featuring the analytical power and integrated functionality of traditional database marketing. The combination of an expanded Alterian Marketing Suite that encompasses online marketing with MSPs' data, services and expertise will provide tremendous value to end users, a host of business opportunities for our partners, and an expanded audience of business partners to adopt the Alterian Marketing Suite."

Jason McNamara, President and CEO of Dynamics Direct, added: "Through our partnerships with organizations like Vertis and Euro RSCG, we have found MSPs to be ideal distributors for the Dynamic Messenger email and online marketing software. The channel of MSPs that Alterian has built is unmatched, and the integration of Dynamic Messenger with the Alterian Marketing Suite presents an even more compelling proposition to this channel. We look forward to being part of Alterian's future growth."

Separately, Alterian plc (Alterian), the leading global provider of database marketing and customer insight solutions, announces its preliminary results for the year ended 31 March 2006.