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This transaction will significantly strengthen the combined companyÂ's leadership inthe fast-growing SOA and Business Process Management (BPM) markets. Together, thecompanies bring an expanded product portfolio to a global customer base of over4,000 organizations and 100 partners in complementary geographies around the globe.Specifically, Software AG will more than double its customer base in North America.This combination also brings complementary industry strengths and minimal customeroverlap, providing immediate and mutual access to additional customer segments,particularly in financial services, manufacturing and the public sector. Thisacquisition builds on the strong reputations and market positions of both companiesand is a major step in Software AGÂ's recently announced plans to more than doubleits revenue to Ââ1 billion (USD $1.3 billion).
"To increase our presence in the Gulf and to strengthen our relationship with ourclients in the region, we established our Gulf headquarters in the Kingdom ofBahrain in June 2006," said Mr. Mohammed Al Fardan, Managing Director  Gulf & EgyptRegion, Software AG Middle East. "The acquisition of webMethods by Software AGworldwide will create a strong industry-leading Service-Oriented Architecture (SAO)and Business Process Management (BPM) product portfolio, which will benefit ourclient base in the Gulf in a huge way as we will also be able to offer them abest-in-class SOA solution. Legacy modernisation is one of our unique strengths,which will offer around 90% of the legacy applications in the regional market achance to go the SOA way."
The acquisition will create an industry-leading SOA and BPM product portfolio withunmatched depth and breadth. The portfolio spans SOA Governance & Enablement, BPMand Business Activity Monitoring, Application Integration and Legacy Modernizationcapabilities.
"This acquisition clearly positions Software AG as one of the global leaders in SOAand BPM. Combining our product portfolio and sales team with those of webMethodsgives us a major foothold in the critical North American market," said Karl-HeinzStreibich, CEO of Software AG. Â webMethodsÂ' Fabric product family combined withSoftware AGÂ's Crossvision SOA suite will provide an end-to-end SOA solution thatallows our combined client base to more effectively create, manage and govern theirbusiness processes. Together we will be creating truly advanced SOA solutions. Welook forward to working with webMethodsÂ' talented team of professionals throughouttheir organization.Â
"By joining forces with Software AG, weÂ're able to fully capitalize on the highlydifferentiated and market leading position that weÂ've established for our productswithin the business integration, SOA and BPM markets. Customers will benefitsignificantly from the greatly expanded product and service portfolio that we willbe able to offer them. This combination will provide additional opportunitiesthrough our shared partner network, our combined geographical strengths and ourcomplementary business models, said David Mitchell, president and CEO, webMethods, Inc.
Given the complementary nature of Software AGÂ's and webMethodsÂ' businesses, SoftwareAG expects to recognize synergies through both revenue enhancement and cost savings."We expect this transaction to be strongly accretive to Software AGÂ's operatingearnings from 2008 onwards," said Software AGÂ's CFO Arnd Zinnhardt. Â Software AGlooks forward to bringing our demonstrated track-record for growth and profitabilityto the combined company.Â
The transaction has been approved by the Supervisory Board of Software AG.webMethodsÂ' Board of Directors has also approved the transaction and will recommendthat their shareholders accept the offer. The transaction is subject to customaryclosing conditions, including regulatory approvals, and is expected to close duringthe second quarter of 2007.
Arma Partners acted as financial advisor to Software AG, and Bear Stearns & Co.,Inc. served as financial advisor to webMethods and provided a fairness opinion towebMethodsÂ' Board of Directors. Davis Polk & Wardwell acted as legal advisor toSoftware AG and Morrison & Foerster, LLP acted as legal advisor to webMethods.
About Software AG Software technology to increase the value of enterprise IT systems. Software AG is aglobal leader in mission-critical software infrastructure solutions based on openstandards. At the forefront of advanced Service-Oriented Architecture (SOA),Software AG enables customers to create powerful enterprise applications  especially in heterogeneous IT environments. Software AGÂ's products Adabas,Crossvision, Natural and Tamino help more than 3,000 customers uncover the fullpotential of their IT and add value to existing systems. With technology fromSoftware AG, enterprises can: create flexible business applications and processes;extend the value and life of core systems; manage data effectively across theenterprise; and control and govern their Service-Oriented Architecture.
Software AG has more than 35 years of global IT experience and over 2,600 employeesserving customers in 70 countries. The company is headquartered in Germany andlisted on the Frankfurt Stock Exchange (TecDAX, ISIN DE 0003304002 / SOW). SoftwareAG posted total revenues of Ââ483 million (unaudited) in 2006. www.softwareag.com
About webMethods webMethods (Nasdaq: WEBM) provides business integration software to integrate,assemble and optimize available IT assets to drive business process productivity.webMethods delivers an innovative, enterprise-class business integration platformthat incorporates proven integration technology with next generation capabilitiesinto one interoperable set of tools that delivers a unique combination ofefficiency, agility and control. webMethods combines industry leadership with azealous commitment to customers to deliver tangible business value to more than1,500 global customers. webMethods is headquartered in Fairfax, Va., with officesthroughout the U.S., Europe, Asia Pacific and Japan.
Important Information
The tender offer for the outstanding shares of common stock of webMethods has notyet commenced. No statement in this announcement is an offer to purchase or asolicitation of an offer to sell securities. Investors and security holders areurged to read both the tender offer statement and the solicitation/recommendationst atement regarding the tender offer referred to in this press release when theybecome available because they will contain important information. The tender offerstatement will be filed by Software AG with the U.S. Securities Exchange Commission("SEC"). A solicitation/recommendation statement with respect to the tender offerwill be filed by webMethods with the SEC. Investors and security holders will beable to obtain a copy of these statements free of charge at the website maintainedby the SEC at www.sec.gov. In addition, the tender offer statement and otherdocuments filed with the SEC by Software AG will be available free of charge bycontacting Morrow & Co., the information agent for the tender offer, toll free at(800) 662-5200 or by e-mail at tender.info@morrowco.com, and thesolicitation/recommendatio n statement and other documents filed with the SEC bywebMethods will be available free of charge by contacting webMethods InvestorRelations at (703) 460-5822.
Forward-Looking Statements
This press release and the conference call announced in it contain forward-lookingstatements that involve risks, uncertainties and assumptions. If such risks oruncertainties materialize or such assumptions prove incorrect, actual results coulddiffer materially from those expressed or implied by such forward-looking statementsand assumptions. All statements other than statements of historical fact arestatements that could be deemed forward-looking statements including the anticipatedtiming of filings and approvals relating to the transaction; the expected timing ofthe completion of the transaction; the expected benefits and costs of thetransaction; management plans relating to the transaction; the ability to completethe transaction considering the various closing conditions, including thoseconditions related to antitrust regulations; any projections of earnings, revenues,synergies, accretion, margins or other financial items; any statements of the plans,strategies and objectives of management for future operations, including theexecution of integration plans; any statements of expectation or belief; and anystatements of assumptions underlying any of the foregoing. Risks, uncertainties andassumptions include risks related to the timing or ultimate completion of thetransaction; the possibility that expected benefits may not materialize as expected;that, prior to the completion of the transaction, webMethodÂ's business may notperform as expected due to uncertainty; that the parties are unable to successfullyimplement integration strategies; and other risks and uncertainties that are beyondthe control of Software AG and webMethods. Software AG and webMethods disclaim anyobligation to update or correct any forward-looking statements made herein due tothe occurrence of events after the issuance of this press release.
