Blackbaud, Inc. Announces Acquisition of Kintera

Blackbaud, Inc. (NASDAQ: BLKB), a provider of software and related services
designed specifically for nonprofit organizations, announced that it is acquiring
Kintera, Inc. (NASDAQ: KNTA), a pioneer and leading provider of a Software as
a Service (SaaS) solution to the nonprofit and government sectors. Under the
terms of the agreement, Blackbaud will pay an all-cash purchase price of approximately
$46.0 million. Blackbaud expects to finance the deal with cash and borrowings
from its credit facility.

Kintera’s principal offering is its online Sphere technology platform,
which is used by such leading organizations as American Lung Association, Big
Brothers Big Sisters of America, International Fund for Animal Welfare, Lance
Armstrong Foundation and Sesame Workshop to manage online fundraising events
and in 2007 processed over $400 million in online gifts. The company also offers
wealth profiling and screening services as well as an accounting software solution,
both similar to offerings of Blackbaud. With approximately 4,000 customers,
Kintera is recognized for the proven capabilities of its Sphere SaaS offering
that has allowed nonprofits to effectively grow their base of supporters and
expand their online fundraising initiatives. The company reported $44.9 million
in total revenue for 2007.

Marc Chardon, Blackbaud’s President and Chief Executive Officer, said, “The
acquisition of Kintera is very exciting for us and for the nonprofit industry
as a whole. Expanding Blackbaud’s online offering in this way further
establishes Blackbaud as the leading solutions partner for nonprofit organizations.
The online solutions of the two companies have historically served different
segments of the market and this acquisition gives us the ability to broaden
our addressable market with proven and rich online product functionality.”

Chardon continued, “Our core capabilities are complementary and we expect
to continue to offer a full range of solutions that effectively meet nonprofits’
needs for donor acquisition and cultivation that are intergrated with our suite
of CRM solutions, including The Raiser’s Edge. Kintera’s “Friends
Asking Friends” team fundraising and advocacy solutions are well suited
for organizations that use these programs to grow their base of supporters.
Similarly, Blackbaud’s NetCommunity offering is ideally suited for enriching
the online experience of current donors enhancing the value of data that already
exists in the CRM system.”

Chardon added, “We are also pleased to offer new options to Kintera’s
accounting and wealth data customers. P!N has been innovative in coupling traditional
wealth screening services with online offerings and we are excited about the
potential of combining these offerings with Target Analytics’ current
product portfolio. Likewise, Fundware has long met the fund accounting needs
of many nonprofits and we expect to work closely with Kintera and their partners
to enhance the range of solutions available to this important set of customers.
Combining these solutions with Blackbaud’s current offerings will allow
us to continue to grow these important segments of our business.”

Kintera will continue to be led by its current President and Chief Executive
Officer, Richard LaBarbera, a high tech industry veteran with more than 30 years
experience working with such leading software providers as Sybase, Siemens/Nixdorf,
Storage Technology and IBM. Kintera operations will continue to be directed
from their existing offices in San Diego.

LaBarbera said, “Joining with Blackbaud gives us a way to leverage our
capabilities with those of the industry leader and thus significantly improve
the customer’s experience. Importantly, this move also means that nonprofits
will be able to choose Kintera solutions confident in the knowledge that they
are backed by Blackbaud’s robust corporate infrastructure and that the
partner they have selected will be there to serve them for many years into the
future. Our focus will now turn exclusively to better meeting the needs of our
customers and collaborating with Blackbaud to leverage the investment they are
making to better serve the nonprofit sector. We are very excited about the potential
to offer more compelling solutions that enhance the donor experience and increase
nonprofits’ abilities to raise more money.”

Tim Williams, Blackbaud’s Senior Vice President and Chief Financial Officer,
stated, “In addition to the strategic reasons supporting the acquisition
of Kintera, we believe the acquisition is attractive from a financial perspective
as well. Subscription revenue was already the fastest growing source of revenue
at Blackbaud and it was expected to become larger than license revenue at some
point in the second half of 2008. With the acquisition of Kintera, this will
become a certainty as we will add another significant source of subscription-based
revenue from an on-demand service offering. The evolution of Blackbaud’s
business model toward new revenue sources with ratable revenue recognition has
been a significant and positive development over the past several years, and
it complements the very strong cash flow profile of the company.”

Blackbaud’s acquisition of Kintera is structured as an all-cash tender
offer for all of the shares of Kintera at a price of $1.12 per share. The company
is expected to formally launch the tender sometime next week and close on or
around July 2.

Technology