Epicor Software Corporation and Scala Business Solutions have jointly announced a proposed merger in terms of which Epicor will make a public offer for all the outstanding ordinary shares in the capital of Scala.
The proposed merger will create the largest independent mid-market provider of collaborative ERP, CRM and SCM applications based on Microsoft's .Net platform and Web services, committed to solving the unique challenges facing mid-market businesses worldwide.
The anticipated aggregate transaction value is approximately $87 million (the equivalent of $3.27 per ordinary share) as of the closing price on 13 November 2003, consisting of a cash price of $41.7 million plus 4.1 million shares of Epicor's common stock, subject to adjustment.
The offer is made up of a cash price of $1.823 per Scala share plus 0.1795 shares of Epicor's common stock. Scala's supervisory board and management board expect to recommend the public offer to its shareholders. On a date to be determined by Scala, an extraordinary general meeting of shareholders will be organised to discuss the public offer. Epicor's board of directors has approved the transaction.
It is expected that the public offer will commence following the completion of Epicor's due diligence investigation of Scala, the receipt of a fairness opinion by Scala, regulatory approvals, the filing of an S-4 registration with the SEC by Epicor, and other customary conditions including among others material adverse changes to Scala and management retention agreements. Epicor anticipates that it will commence the public offer for all outstanding ordinary shares of Scala and publish an offer memorandum in December 2003 and close the transaction in the first quarter 2004. The combination is expected to be accretive to Epicor's GAAP earnings in the second quarter 2004 and for the fiscal year 2004.
"We are delighted to join forces with Scala's exceptional and visionary team as we pursue tremendous global opportunities. The acquisition of Scala will enable Epicor to expand its capabilities to service and support its customers, to become a truly global organisation with substantial revenue and operating synergies. The organisation will allow us to leverage Epicor's and Scala's regional strengths and distribution channels to further support multinational customers around the world," says George Klaus, chairman, president and CEO at Epicor.
"This combination also further leverages our industry-endorsed roadmap to deliver .Net solutions and Web services to an expanding base of mid-market customers," he adds.
"Today's announcement is exciting news for the shareholders, customers, employees and partners of both our companies," said Andreas Kemi, Chief Executive Officer at Scala. "Together, we stand on the threshold of enormous opportunity driven by our potential to offer a range of Microsoft technology-based products that are broader and deeper in functionality and would be delivered to market faster than either Epicor or Scala could have done independently. With the collaborative expertise offered by this new partnership - and guided by our shared vision of improving the business success of our customers worldwide - we are in position to rapidly deliver and deploy our leading business software solutions across the globe."
Shamik Sinha, CEO of Scala Africa, says the combined company will expand its global presence with worldwide coverage of sales, consulting and support for mid-market and large multinationals as well as local enterprises, offering a broad suite of integrated solutions that have been implemented by more than 20 000 customers worldwide.
"Both Epicor and Scala customers will be served by a global entity with the reach and scale to more effectively support their operations, and will be well positioned for growth with local support in emerging markets such as throughout Africa," says Sinha.
Scala's customer base is predominantly European with Epicor's largest customer base predominantly in North America, Australia and the UK. The resulting company's revenues will be diversified across regions with approximately 52% of its revenue base in North America and 48% outside North America.
The combined company plans to further support and develop iScala products, while in the long-term, the combined company's product offerings will be developed using the functional synergies of all products, and the integration advantages of .Net and Web services.
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Epicor is a leading provider of integrated enterprise software solutions for mid-market companies around the world. Founded in 1984, Epicor has over 15 000 customers and delivers end-to-end, industry-specific solutions that enable companies to immediately improve business operations and build competitive advantage in today's Internet economy. Epicor's comprehensive suite of integrated software solutions for customer relationship management, financials, manufacturing, supply chain management, professional services automation and collaborative commerce provide the scalability and flexibility to support long-term growth.
Epicor's solutions are complemented by a full range of services, providing single point of accountability to promote rapid return on investment and low total cost of ownership, now and in the future. Epicor is headquartered in Irvine, California and has offices and affiliates around the world. For more information, visit www.epicor.com.
Scala Business Solutions
Scala Business Solutions creates collaborative ERP software - integrating Internet technology and traditional ERP functionality - to make global business simple. With Scala, global companies can fully integrate all their ERP systems anywhere in the world, whether in a subsidiary, division or headquarters, and extending to their partners and suppliers.
Scala's collaborative ERP software makes it possible for global companies to meet the requirements for advanced e-business as well as use a standard ERP product for managing traditional business processes. This enables them to gain measurable benefits from trading electronically, building a private exchange or global portal, or optimising the supply chain.
From offices in Europe, North America and the Far East, and through its network of partners and dealers, Scala delivers software and services that are available in over 30 languages in more than 140 countries.
Scala is listed on the Euronext Amsterdam Stock Exchange (symbol: SCALA). 2002 revenue was $73.4 million.
Visit Scala's Web site at www.scala.net for press information including press releases, information for investors, and company and product information.
Scala Africa
Scala Business Solutions is represented in Africa and the Indian Ocean Islands by Scala Africa, which provides sales, consulting and implementation skills to a customer base of 70 companies in SA and a further 300 in the rest of Africa and the Indian Ocean Islands. Headquartered in Johannesburg and with offices in countries including Kenya, Uganda and Nigeria, Scala Africa (Pty) Ltd, is a truly pan-African concern that offers integrated, collaborative ERP solutions to businesses across the continent. Visit Scala's Web site at www.scala.co.za for press information including press releases, information and product information.
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