Towne Services, Inc. Announces Proposed Merger with Private Business, Inc

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Towne Services, Inc. (Nasdaq/NM:TWNE) today announced the execution of a letter of intent to engage in a strategic merger with Private Business, Inc., (Nasdaq:PBIZ). Based in Brentwood, Tennessee, Private Business is a leading provider of technology-driven solutions that help banks manage accounts receivable financing for small businesses. The company's software-based solution, Business Manager(R), automates the management of accounts receivable financing for a network of over 1,100 community banks throughout the nation The letter of intent provides that Towne's shareholders would own approximately 36% of the surviving corporation's capital stock following consummation of the merger. Final terms of the proposed transaction will be disclosed upon the signing of a definitive agreement, which is expected by March 31, 2001. The merger is subject to customary closing conditions, including approval by the shareholders of both companies, and is expected to close in the first half of 2001.

Commenting on the transaction, Lynn Boggs, chairman and chief executive officer of Towne Services, commented, "We are very excited to have the opportunity to join forces with Private Business in the merger of the two leading companies in the electronic transaction processing industry. We believe there are a number of significant financial and operating synergies that will be immediately realized with the combination of two companies who bring different, but very complementary strengths to the merger. Private Business has an outstanding sales culture with an enviable record of profitable sales to a nationwide network of community banks and thousands of small businesses across the United States. We believe that with our proprietary electronic gateway that links banks, businesses and consumers, we will now have a greater opportunity to enhance our market coverage by leveraging the strength of their sales program with our proven technology. Additionally, with over $12.4 million in cash...
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