STERLING SOFTWARE ANNOUNCES AGREEMENT TO PURCHASE CAYENNE SOFTWARE
Dallas - Sterling Software, Inc. (NYSE: SSW), the industry leader in enterprise application development solutions, today announced an agreement to acquire Cayenne Software, Inc. (Nasdaq: CAYN), a global supplier of analysis and design solutions for application and database development, headquartered in Bedford, Mass.
Under the agreement, Sterling Software will purchase Cayenne Software in a cash merger transaction valued at approximately US Dollars 11.4 million. Of this amount, approximately dlrs 3.4 million, or dlrs 20.00 per share, would be allocated to Cayenne's preferred stockholders, and approximately dlrs 8.0 million, or dlrs 0.375 per share, would be allocated to Cayenne's common stockholders. Sterling Software has agreed to provide credit support to Cayenne for up to dlrs 3 million of working capital borrowings prior to closing. The amount of any such borrowings outstanding at closing would reduce the merger consideration allocated to Cayenne's common stockholders. The companies anticipate closing the acquisition in October 1998 and merging Cayenne's business into Sterling Software's application development business.
Cayenne's modeling and design environments are used for business planning, analysis and implementation, as well as for the development of real-time, technical and embedded software. Its products are used by Fortune 500 companies in a wide range of industries, including financial services, telecommunications, wholesale/retail, utilities, transportation, aerospace and medical instrumentation.
"Cayenne's customers will benefit from this merger in a number of ways," said Sterling L. Williams, president and chief executive officer of Sterling Software. "Namely, Sterling Software has a worldwide presence, leading-edge tools and the stability of a company that, just this month, reported its 39th consecutive quarter of revenue and earnings per share growth."
John J. Alexander, president, chief executive officer and chairman of Cayenne Software, said, "Sterling Software is known to be one of the most innovative application development companies in the industry. Add to that the fact that Sterling Software is a financially strong, rapidly growing market leader, and we're confident that we've made an excellent decision for our customers and our business partners."
This acquisition marks the 30th in the history of Sterling Software. It is also the company's third acquisition in less than three months. Mr. Williams said that execution of Sterling Software's on-going acquisition strategy has increased stockholder value by accelerating revenue growth and enhancing earnings per share. He also noted that the acquisition of Cayenne is expected to be immediately accretive to Sterling Software's earnings per share.
Sterling Software is a leading provider of software and services for the applications management, systems management and federal systems markets. Sterling Software, with its headquarters in Dallas, has a worldwide installed base of more than 20,000 customer sites and has 3,500 employees in 95 offices worldwide. For more information on Sterling Software, visit the company's Web site at http:\\www.sterling.com
This news release contains certain forward-looking statements that reflect the current views and expectations of Sterling Software with respect to future events. Such statements are subject to a number of risks, uncertainties and assumptions detailed in Sterling Software's periodic reports filed with the Securities and Exchange Commission. Actual results may vary significantly.
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