04/05/2007

Software AG (TecDAX, ISIN DE 0003304002/SOW), Europe's largest systems software and Service-Oriented Architecture (SOA) provider, and webMethods, Inc. (Nasdaq: WEBM), a leading business integration and optimization software company, today announced that they have entered into a definitive agreement for Software AG to acquire webMethods in a cash tender offer for $9.15 per share or approximately $546 million.

ebizQ received the following details:

This transaction will significantly strengthen the combined company's leadership in the fast-growing SOA and Business Process Management (BPM) markets. Together, the companies bring an expanded product portfolio to a global customer base of over 4,000 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 customer overlap, providing immediate and mutual access to additional customer segments, particularly in financial services, manufacturing and the public sector. This acquisition builds on the strong reputations and market positions of both companies and is a major step in Software AG's recently announced plans to more than double its revenue to EUR 1 billion (USD $1.3 billion).

The acquisition will create an industry-leading SOA and BPM product portfolio with unmatched depth and breadth. The portfolio spans SOA Governance & Enablement, BPM and Business Activity Monitoring, Application Integration and Legacy Modernization capabilities.

"This acquisition clearly positions Software AG as one of the global leaders in SOA and BPM. Combining our product portfolio and sales team with those of webMethods gives us a major foothold in the critical North American market," said Karl-Heinz Streibich, CEO of Software AG. "webMethods' Fabric product family combined with Software AG's Crossvision SOA suite will provide an end-to-end SOA solution that allows our combined client base to more effectively create, manage and govern their business processes. Together we will be creating truly advanced SOA solutions. We look forward to working with webMethods' talented team of professionals throughout their organization."

"By joining forces with Software AG, we're able to fully capitalize on the highly differentiated and market leading position that we've established for our products within the business integration, SOA and BPM markets. Customers will benefit significantly from the greatly expanded product and service portfolio that we will be able to offer them. This combination will provide additional opportunities through our shared partner network, our combined geographical strengths and our complementary business models," said David Mitchell, president and CEO, webMethods, Inc.

Given the complementary nature of Software AG's and webMethods' businesses, Software AG expects to recognize synergies through both revenue enhancement and cost savings. "We expect this transaction to be strongly accretive to Software AG's operating earnings from 2008 onwards," said Software AG's CFO Arnd Zinnhardt. "Software AG looks forward to bringing our demonstrated track-record for growth and profitability to the combined company."

The transaction has been approved by the Supervisory Board of Software AG. webMethods' Board of Directors has also approved the transaction and will recommend that their shareholders accept the offer. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close during the second quarter of 2007.

Arma Partners LLP acted as financial advisor to Software AG, and Bear Stearns & Co., Inc. served as financial advisor to webMethods and provided a fairness opinion to webMethods' Board of Directors. Davis Polk & Wardwell acted as legal advisor to Software AG and Morrison & Foerster, LLP acted as legal advisor to webMethods.