CMGI to Acquire Modus Media

Acquisition creates global supply chain management firm with combined revenues of approximately $1 billion

Acquisition creates global supply chain management firm with combined revenues of approximately $1 billion

Charlestown, MA — March 25, 2004 — Technology and commerce solutions provider CMGI Inc. announced today it has entered a definitive merger agreement to acquire Modus Media Inc., a privately held provider of supply chain management solutions with annual revenues for 2003 of approximately $543 million.

CMGI said it would acquire all of the stock of Modus for approximately $157.5 million in CMGI common stock and a net cash payment of approximately $73 million to retire indebtedness. The transaction is expected to close in the third quarter of calendar year 2004.

By acquiring Modus Media, CMGI said it would create a supply chain management company with nearly $1 billion in annual revenue and 38 locations in 13 countries. The client roster will be diversified and include leaders in technology, software and consumer electronics.

George McMillan, president and CEO of CMGI, said the acquisition of Modus was well timed for CMGI as it was in the process of expanding its position, particularly in China.

"Our combined global footprint covers all major markets and includes a very strong presence in China, the most rapidly growing market in the world. Clients will benefit from our ability to service them everywhere with our complete set of supply chain, order management, fulfillment and reverse logistics capabilities," McMillan said.

CMGI said other highlights from the acquisition include combined business revenues that approach $1 billion, an established network of 38 locations across 13 countries, a broadly diversified set of key customers and operational synergies.

"The combination of our collective management teams, operational and managerial expertise, breadth of service offerings and global presence creates a powerful supply chain management company that has a strong balance sheet and is competitively well-positioned globally," said Scott Murray, CEO of Modus. "Together, we expect to continue to make strategic investments in new innovative solutions and services that add value to our clients and employees."

Modus delivers integrated supply chain management services to companies in the hardware, software, telecommunications, broadband and wireless industries. It operates 23 solution centers in 13 countries including the United States, Mexico, Ireland, Scotland, Netherlands, France, Hungary, China, Taiwan, Singapore, Malaysia and Korea, and through a joint venture in Japan.

Through its subsidiary, SalesLink, CMGI provides supply chain, marketing distribution and fulfillment services to a variety of global companies. SalesLink has nearly 30 years of experience in serving clients in a range of industries and maintains 15 facilities in seven countries.

J.P. Morgan Securities Inc. acted as financial advisor to CMGI in connection with the merger.