Computer Associates to acquire Netegrity

Computer Associates International, Inc today announced it has signed a definitive agreement to acquire Netegrity, Inc, a leading provider of security software solutions, in an all cash merger valued at approximately $430 million or $10.75 per fully diluted common share, or approximately $340 million net of the cash and marketable securities on Netegrity`s balance sheet.

The acquisition is subject to customary regulatory approvals and the approval of Netegrity`s shareholders, and is expected to be completed in the next 90 days. Stockholders representing approximately 10% of the outstanding Netegrity shares have executed voting agreements pursuant to which they have agreed to vote in favour of the transaction.

"CA continues to move forward and align its resources and investments with the company`s strategic growth opportunities: internal development, geographic expansion, new routes to market and acquisitions," said CA`s Chief Executive Officer Kenneth Cron.

"By adding the best Web security product on the market to its portfolio, CA significantly strengthens its leading position in identity and access management (IAM). Security continues to be critically important to CA, and we will ensure that we offer customers the broadest and deepest IAM suite in the industry."

The acquisition is expected to be neutral in fiscal 2005 and slightly accretive in fiscal 2006 on a GAAP basis through cost synergies alone.

"CA conducted extensive due diligence of Netegrity," said CA`s Chief Operating Officer Jeff Clarke. "I am confident this acquisition will deliver a financial return in excess of our weighted average cost of capital. In addition, we believe there is the potential for substantial upside through revenue synergies.

"We were informed of Netegrity`s earnings pre-announcement and priced our offer accordingly. This acquisition will continue to build CA`s leadership position in security management. Our balance sheet is solid, and as we continue to see opportunities for consolidation throughout the industry, we will leverage these opportunities to round out our product portfolio and build out our enterprise infrastructure management strategy," added Clarke.

Netegrity`s operations will be integrated with CA`s eTrust Identity and Access Management group. CA is currently evaluating the significant cost efficiencies associated with the integration. It is anticipated that the vast majority of Netegrity`s approximately 400 employees will remain with CA.

"Our customers are looking to reduce costs, increase productivity and provide secure environments for their businesses," said Russ Artzt, CA`s executive vice-president for eTrust Solutions. "Suites of products that are well integrated and have all the necessary IAM functionality provide the answer to many of our customers` concerns.

"A secure environment starts with access management, which is why it is critically important to have the best solution. Netegrity is the clear leader in extranet access management and is a significant player in the emerging provisioning market. In addition, Netegrity has a focused sales team, enhanced by skilled solution architects and software development teams. We`re proud to have them join CA," added Artzt.

eTrust Identity and Access Management Suite is a complete, standards-based solution for automating and integrating identity and access management across enterprise, customer and partner environments.

In addition to its market-leading access management solution for Web-based and enterprise applications, SiteMinder, Netegrity also offers TransactionMinder, the industry`s first policy-based solution to secure access to Web services; IdentityMinder Web Edition, a flexible, roles-based user administration and access management solution for Web-based applications; and IdentityMinder eProvision, a comprehensive solution for creating, modifying and terminating identity-based access to enterprise systems and physical resources.