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EANS-News: Software AG announces IDS Scheer AG takeover offer

Darmstadt (euro adhoc) -

  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
merger, acquisition and takeover
- The merger will establish a new global
player in infrastructure software and  Business Process Management 
(BPM) - Software AG will make a cash offer for all outstanding shares
of EUR15 per share - IDS Scheer founder Prof. Dr. Dr. h.c. mult. 
August-Wilhelm Scheer and co-founder Prof. Dr. Alexander Pocsay 
support the offer and will tender their shares to Software AG (ca. 
48% of the share capital of IDS Scheer) - Software AG´s customer base
will be more than doubled - Software AG´s technology leadership in 
Business Process Management (BPM/BPA) will be significantly and 
sustainably strengthened
Darmstadt, Germany 14 July 2009 - Software AG (TecDAX, ISIN DE 
0003304002 / SOW) today closed a contract with Prof. Dr. Dr. h.c. 
mult. August-Wilhelm Scheer and Prof. Dr. Alexander Pocsay for the 
transfer of ca. 48% of the outstanding shares of IDS Scheer (TecDAX, 
ISIN DE 0006257009 /IDS). The sale of these shares will be part of a 
public tender offer by SAG Beteiligungs GmbH, a wholly-owned 
subsidiary of Software AG, starting in the current quarter. Software 
AG will offer EUR15 in cash per outstanding share of IDS Scheer 
capital. This represents a purchase price for the entire share 
capital of around EUR487 million. After obtaining regulatory 
approval, the formal offer period will start in August and finish 
before the end of September. As ca. 48% of the shares have been 
contractually secured it is not necessary to set a minimum quota.
The term and conditions of the offer for outstanding shares will be 
detailed in the offer document. The offer is subject to the approval 
of the relevant antitrust authorities. Prof. Scheer, the founder and 
Chairman of the Supervisory Board of IDS Scheer AG, and Prof. Pocsay,
co-founder and Vice Chairman of the Supervisory Board of IDS Scheer 
AG, have committed themselves to accepting the offer for all of their
IDS Scheer shares.
The transaction will create a global producer of infrastructure 
software And Business Process Management software with more than 
6,000 employees and more than EUR1 billion in revenue. Software AG´s 
strengths: technology leadership in middleware software, financial 
strength and a global presence will complement IDS Scheer´s 
strengths: the modeling, implementation and controlling of business 
processes, a strong partner network and a large service presence in 
their approx. 7,500 customer base. IDS Scheer also offers extensive 
industry expertise and direct access to vertical markets and a strong
presence in the SAP consulting business.
The combination of both leading technologically and complementary 
product portfolios for the digitization and implementation of 
business processes of both companies will be unique and give the 
combined company a sustainable and strengthened competitive position 
in a rapidly consolidating software market. In particular, by 
reaching a critical size in more key European markets, the company 
market access will be significantly improved. In addition, the 
consulting expertise of IDS Scheer will allow Software AG to increase
market penetration of its own products in industry-specific and large
projects.
Software AG will benefit from increased visibility and influence in 
the growing market for Business Process Management (BPM) technology. 
The merger will also create a new powerful service provider for the 
integration of SAP solutions in heterogeneous application landscapes.
This will provide efficient, web-based IT systems providing customers
a real competitive advantage.  The integration and re-use of existing
software on the basis of service-oriented Architectures (SOA) allows 
customers to digitalize their business processes and provides a 
quantum leap in productivity.
The joint company strategy will be clearly focused on growth. The 
growth drivers will be increased revenue of the combined product 
offering, an enhanced market access and the specialist expertise of 
IDS Scheer's consultancy business. This consulting expertise will 
benefit customers-specific implementation of service-oriented 
Architectures (SOA) and BPM solutions, particularly in an SAP 
environment. The combination of the two successful business models is
expected to be accretive to Software AG´s operating earnings per 
share already in the first full fiscal year of consolidation (2010). 
For IDS Scheer business, the merger provides opportunities for 
enhanced growth, for the long-term future and globalization of the 
ARIS brand as well as a secure, long-term future in a consolidating 
software market. Both companies have strong brands, an excellent 
global reputation and a high degree of cultural affinity. Both IDS 
Scheer and Software AG employees will have the opportunity to work 
for a large, rewarding company; the technology leader in 
infrastructure and process management software with long-term and 
international career opportunities. Software AG is confident that IDS
Scheer management and the entire workforce will support this 
initiative. Saarbrücken is today an important location for the IT 
industry in Germany and will remain so.
Results 2nd Quarter 2009
According to preliminary figures, Software AG will report a total of 
approximately EUR175-EUR177 million for the 2nd Quarter of 2009. This
represents an increase of 4-5 percent compared to the same quarter in
2008. Growth driver was again largely due to the profitable product 
business (licenses and maintenance), which increased by more than 8 
percent to about EUR133 to EUR134 million meeting expectations. Lower
service revenue (approximately EUR42 to EUR43 million) than in the 
previous year (EUR45.6 million) weakened growth, without affecting 
earning power to any appreciable extent. Therefore, Software AG 
expects the 2nd Quarter of 2009 will have an increase in the EBIT 
margin, compared to the previous year, to about 25 percent (previous 
year: 24.3%) and a significantly improved free cash flow 
(approximately EUR29 million, up more than 25 percent over the 
previous year).
Outlook 2009
The proposed acquisition will change Software AG´s revenue 
expectations for the full year 2009, to date forecast at four to 
eight percent growth (currency adjusted). Depending on the date of 
first consolidation of IDS Scheer AG the growth rate can be 
significantly exceeded. A concrete prognosis can only be given after 
the closing of the acquisition, at the earliest with the results of 
the 3rd quarter. This also applies to the forecast of synergies and 
the expected EBITDA margin of the consolidated results.
Quotes
"Software AG and IDS Scheer complement each other perfectly. With the
merger of two technology leaders we will create a globally 
significant company. Our expertise in business process management 
will be unique and will increase our competitiveness in this growth 
market", said Karl-Heinz Streibich, CEO of Software AG. "Our robust 
business model and stable business performance enables Software AG to
make this significant investment. We want to drive the strategic 
development of the company even in economically difficult times" 
added Streibich.
"After 25 years of success, the right time has come for IDS Scheer to
look to new horizons. Together, Software AG and IDS Scheer will 
further establish Germany as an international IT location. The two 
companies, both in product as well as consulting - make a perfect 
strategic fit. The staff of IDS Scheer benefit from even broader 
prospects in the future and the ARIS methodology will be sustainably 
established globally. I am optimistic about the joint development of 
both companies, "said Prof. Dr. Dr. h.c. mult. August-Wilhelm Scheer,
major shareholder and founder of IDS Scheer.
For further Information:
Further details of the proposed transaction will be announced by 
Software AG on Tuesday July 14, 2009 in a telephone press conference 
at 09:00 CET (in German): Dial-In numbers, Germany: +49 6958 999 0712
(toll-free: 0800 1012119
end of announcement                               euro adhoc

Further inquiry note:

Norbert Eder <Norbert.Eder@softwareag.com>
Vice President Corporate Communications
Phone +49 (0) 6151 92-1146
Fax +49 (0) 6151 92-1623

Branche: Software
ISIN: DE0003304002
WKN: 330400
Index: TecDAX, CDAX, HDAX, Prime All Share, Technologie All Share
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Hamburg / free trade
Stuttgart / free trade
Düsseldorf / free trade
Hannover / free trade

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