NGRU Netguru

Privately held BPO Management Services, Inc. (BPOMS) entered into a definitive agreement to merge with publicly held netGuru, Inc. (netGuru) (Nasdaq:NGRU), a provider of document management software and outsourced information technology (IT) services. The transaction involves a reverse merger in which BPOMS would emerge as the surviving public entity, and the U.S.-based business of netGuru would be integrated into BPOMS to provide customers of both companies with a broader service offering from which to fulfill their back-office outsourcing needs. In a simultaneous transaction the Indian operations of netGuru will be divested, and BPOMS will enter into a support agreement with the India-based company in order to offer its customers the economic efficiencies and technology expertise inherent with offshore service providers. BPOMS, a Delaware corporation founded in July 2005, offers a wide range of BPO-on-demand services, including human resources (HRO), information technology (ITO), enterprise content management (ECM), and finance and accounting to support the back-office functions of middle-market enterprises. The merger with netGuru would add key document management and information technology services that would be integrated into BPOMS's operations and further enhance BPOMS's existing services and capabilities. Headquarters for the merged companies are planned for Yorba Linda, California, and would complement existing BPOMS operations in San Francisco; Branchburg, New Jersey; and the Canadian cities of Winnipeg, Regina, and Toronto. These offices would be joined by netGuru offices located in Boston and Wurzburg, Germany, to provide access to both the North American and European marketplace. BPOMS Chief Executive Patrick Dolan commented: "Our merger with netGuru represents a key step in our broader plan to offer a comprehensive set of cost-competitive back-office outsourcing services to the thousands of companies in the underserved middle market. Middle-market companies understand the significant benefits of BPO and potential cost savings that an experienced service provider offers. But the problem lies in the absence of experienced and suitably scaled providers who are capable of efficiently serving that market; therefore, demand by middle-market companies for BPO services is clearly not being met. "Traditionally, comprehensive back-office BPO services have been available only through large-scale Tier-1 providers such as IBM, ACS, Accenture, and EDS, and offered almost exclusively to Fortune 500 companies because of their large size and commensurate budgets," Dolan continued. "In contrast, the service-provider landscape for middle-market companies is highly fragmented with no clear leader. With this merger and other strategic acquisitions being planned, BPOMS expects to become the leader in the middle market by offering the same comprehensive back-office services to mid-sized companies at lower cost compared to the larger and higher-priced Tier-1 providers. In addition, because of our lower-cost structure, we intend to offer selective outsourcing services to Fortune 500 companies for those functions which are not being cost-effectively met by their primary Tier-1 providers. "Financially, this merger provides BPOMS with access to public capital markets and enhanced opportunities to achieve substantial revenue growth and correspondingly higher shareholder value," Dolan added. "Demand for business process outsourcing services, especially those related to noncore competencies such as human resources, IT, and related functions, is rising and presents significant growth opportunities. "From an investment standpoint, high customer contract renewal rates and therefore recurring customer revenue have proven to be important contributors to creating higher market valuations for BPO service providers," Dolan stated. "In addition, BPOMS will pursue key public-company advantages for our stockholders, including share liquidity and higher, peer-comparable market valuation." The proposed merger has been approved by BPOMS and is subject to approval by netGuru shareholders. For additional information and terms of the proposed merger, refer to netGuru's announcement on August 30, 2006, at http://www.netguru.com/press/PR-083006.asp. About netGuru, Inc. netGuru is a technology and services company offering document and project collaboration software/solutions and technical services and support. For more information, please visit www.netguru.com. About BPO Management Services, Inc. BPO Management Services (BPOMS) is a BPO service provider who offers a diversified range of solutions and support services to fulfill the back-office needs of middle-market enterprises on an outsourced basis. BPOMS supports middle-market businesses new to the BPO market, established businesses that already outsource, and businesses seeking to maximize return-on-investment from their in-house workforce. For more information, please visit www.bpoms.com.