Filing under Rule 425 under
the Securities Act of 1933
and deemed filed under Rule 14a-12
of the Securities Exchange Act of 1934
Filing by: BROKAT Infosystems AG
Subject Company: Blaze Software, Inc.
SEC File No. of Blaze: 000-29817
CONTENT
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Stake Holder 1
Deal Structure 3
Strategy & Positioning 3
Financials 4
Chapter 1 Stake Holder
I'm a Blaze customer, what does this mean for me?
With the acquisition, Blaze's technologies and products will become members of a
greater family of e-Business software products we call the e-services platform.
You will therefore not only have access to Blaze's existing products, but will
benefit from their integration into Brokat's leading Twister platform,
especially as a link between our multi-channel e-front office and CRM
applications. Blaze products will continue to be available individually.
What is Customer Relationship Management (CRM)?
According to OVUM: "Customer Relationship Management is a concept, or management
discipline (like Business Process Reengineering) concerned with how
organizations can increase retention of their most profitable customers,
simultaneously reduce costs and increase value of interactions, thereby
maximizing profits." The goal of Customer Relationship Management is to optimize
customer care in order to get satisfied and loyal customers. (Analyst Patricia
Seybold put it into simple words: "make it easy for your customers to do
business with you").
I'm a GemStone customer, what does this mean for me?
With the acquisition, GemStone's technologies and products will become members
of a greater family of e-Business software products we call the e-services
platform. You will therefore not only have access to GemStone's existing
products, but will benefit from their integration into Brokat's leading
Twister platform, extending it with the best-performing EJB application server.
GemStone products will continue to be available individually.
Why is EJB/J2EE important?
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For infrastructure platform vendors selling into the top-tier enterprises it is
crucial to supply a bulletproof implementation of the J2EE standard in order to
satisfy market demands for open standards. J2EE implementations ready for "prime
time" need to comply to the definition of the standard and have to be robust,
scaleable and offer high-performance in order to be applicable in
mission-critical environments. For the e-Services Platform concept the oncoming
adoption of EJB in "real e-Business" represents a key market need that has to be
addressed. The Enterprise Application Server within the e-Services Platform has
to live up to the promises of the J2EE standard.
I'm a Brokat customer, what does this mean for me?
Both acquisitions make perfect sense for all our customers, as they extend our
Twister platform naturally. With the acquisition of GemStone we can offer
industry-standard (EJB) compliance of our enterprise application server, faster
time-to-market via lower Java entry barrier and lower cost of ownership through
a more efficient server architecture. With the integration of Blaze's rule
engine, we can offer a rapid change of applications in the volatile market
conditions of our customers, an improved CRM functionality across all channels
as well as a cost reduction through business process automation. According to
our plans, we would have had to develop these functionalities anyway. Now we can
complete and stabilize our Twister platform considerably earlier and can
therefore concentrate on new topics such as mobile business.
I'm a business partner of any of the three companies. How does this deal
benefit me?
Systems integrators, VARs as well as vertical application vendors will strongly
benefit from the even more robust and complete Twister platform as a cornerstone
for their customers' e-business applications. For Isis, these transactions bring
together what they have asked for: the EJB and the CORBA enterprise application
server, the multi-channel interaction, the enterprise application integration
and the enhanced CRM functionality. As the new Brokat will vertically remain
focussed on financial applications, we herewith invite ISVs around the globe to
partner with us in order to provide our platform together with their vertical
applications in industries such as health care, governments or logistics and
transportation.
I'm a Brokat shareholder. How does this merger affect me?
You do not have to exchange any shares or take any action. The number of shares
you own will not change due to this transaction. Your overall ownership in the
Company will be diluted by approximately 19% as the overall number of
outstanding shares increases.
I'm a Blaze shareholder. When will Brokat list at the NASDAQ and how do you
exchange Blazes shares for Brokat shares? What will happen to my shares?
The timing heavily depends on the review by the SEC of Brokat's filing. This
process will probably last until September or October. After the filing is
declared effective, the merger will be consummated and the Blaze shares can be
exchanged into Brokat ADS through an exchange agent. Blaze stock will be
delisted from NASDAQ, as by then 100% of Blaze shares will be held by Brokat.
What are the implications of Brokat's shares being traded as ADSs (American
Depository Shares)?
The closing of the acquisitions does not imply the listing of the ADSs on the
NASDAQ. Rather, the NASDAQ listing is a separate issue, carried out for the
convenience of Brokat's new US-based shareholders. A US listing enables the
shares to be traded on local market exchanges. The shares and dividends are
denominated in US dollars. The ADSs may be as liquid as the underlying shares in
Germany, because the two are interchangeable.
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Chapter 2 Deal Structure
How much will Brokat pay for Blaze and GemStone?
Blaze: 4,9 Million shares or about $560,5 Million for Blaze equity (as of
19.6.00)
GemStone: 2,4 Million shares or about $271,2 Million for GemStone equity (as of
19.6.00)
How is Brokat paying for this?
The acquisition of GemStone is financed by issuing new Brokat shares tradeable
on the Neuer Markt. The acquisition of Blaze will be financed by the issuance of
American Depository Shares (ADSs) on the NASDAQ. The overall number of Brokat
shares outstanding will increase due to these transactions by the amount of
shares given to Blaze and GemStone shareholders.
What will Brokat's cash position be after the transaction?
Brokat is not paying cash for the two companies. Therefore, their cash position
will not change as a direct result of the transactions. However, Brokat will
assume Blaze's and GemStone's cash and cash equivalents, totaling approximately
$70 million, which will give Brokat a total cash position of about $160 Million.
What will the share holder structure be after the deal?
Current Brokat shareholders will own 81.1% of the outstanding stock, Blaze
12.4%, and GemStone 6.5%.
Current Brokat Management will own approx. about 30% after the acquisitions.
What will Tom Kelly's, Ken Irinaga's and Boris Anderer's role be?
Tom Kelly will serve as a chairman of Brokat, Inc.'s board in the US and Ken
Irinaga will become a non-executive director on that board. Boris Anderer is
intended to move to Brokat AG's supervisory board (Aufsichtsrat).
What will Stefan Rover's role be?
Stefan Rover will remain the CEO of the company as a member of the executive
committee of Brokat AG and will have a seat in Brokat, Inc.'s board. He will
relocate to San Jose.
Where will Brokat be headquartered?
Brokat's corporate headquarters will remain in Stuttgart with the US
operation (the Inc. company) being headquartered out of San Jose, CA.
What will the employee structure look like and how big will the company be in
total?
With R&D, Sales and Services each staffed at about 300 employees world-wide plus
150 staff in G&A, the new Brokat will have grown to a size of more than 1,100
employees by this transaction Strategy & Positioning
Chapter 3 Strategy & Positioning
What is the rationale of the acquisitions?
Listening to customer requests and analysts' consultations, Brokat has realized
that it needs both, a leading-edge, standard-compliant EJB server as well as a
strengthening of its CRM capabilities, especially in multi-channel
e-front-offices. Also, we have realized that we will ultimately only succeed if
we strengthen our position in our industry's core market, the US. Since it would
have
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taken too much time and resources to achieve this through organic growth, we are
excited about acquiring Blaze and GemStone.
I thought Brokat was a financial application provider. How does this fit into
the picture?
Brokat has always maintained the view that business has two main elements:
software infrastructure and key applications. Our Twister platform as such is
perfectly suited for cross-industry applications and on top of that our
specific, vertical applications for financial transactions such as brokerage,
banking to insurance. We strongly believe that this combined approach sets us
apart from our competitors and that we have thereby chosen the toughest
environment (i.e. the financial industry) to prove the viability of our
platform. We will therefore continue to build these vertical applications on an
even improved infrastructure. We want to partner with third party ISVs for all
other industries.
I heard Brokat provides mobile-commerce solutions. Will this still be true?
A specific benefit of the Twister platform is that it combines technology AND
business logic. We have therefore developed and deployed a set of horizontal
business services such as payment and billing that we can provide across all
interactive customer channels, from the web via self-service terminals to mobile
devices. A new breed of customers are all e-business champions that want to
"mobilize" their transactions. Amongst them are also mobile phone operators out
of which we have recently won a number of high-end projects.
What does Brokat mean by "blue-print for e-business"?
Brokat supplies software infrastructure and applications for companies that
provide transactional services over electronic delivery channels ("e-services").
Unlike other software vendors offering individual pieces of a puzzle, Brokat
delivers integrated e-Business Solutions that combine technology and business
infrastructure with applications. Vertically, Brokat is focused on financial
applications such as e-banking, e-brokerage and e-payment. Horizontally Brokat
is specialized in integrating electronic delivery channels such as the internet
and mobile phones, with a particular emphasis on mobile authentication
("meSign").
What is this me-Sign consortium and Brokat's role in it?
Brokat has realized the need for non-repudiative authentication and security in
e-transactions at a very early stage. Two years ago we also identified the
mobile phone as a perfectly personal device for that identification and
authentication already since over two years. We have therefore developed
technologies and a business model that is pending for patent in order to
introduce a global standard for this method. We have chosen to make this
intellectual property publicly available by initiating a global, industry-wide
consortium (called The Mobile Electronic Signature Consortium, or me-Sign
consortium in short) that is open for anybody ranging from device manufacturers
to mobile operators, from financial institutions to smart card manufacturers and
from enabling service providers (such as payment) to software vendors like us.
Although initiated by Brokat, the me-Sign consortium is an independent forum
with independent management, operations and headquarters.
Chapter 4 Financials
When will Brokat be profitable?
Analysts expect Brokat to reach profitability by 2002. The acquisitions should
enable Brokat to reach profitability earlier, which means most likely in 2001.
This results from a combination of revenue improvement and more effective cost
management. Revenue improvement can be achieved through cross-selling,
geographic expansion, and more effective marketing. Company resources will be
more effectively utilized as existing assets and staff complement each other in
the development of new geographic regions and sales/marketing channels. Much of
the planned
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build-up of staff in the USA is effectively (and efficiently) accomplished
through these strategic acquisitions.
The assumptions underlying this statement are subject to uncertainties. Please
refer to the page at the end of this document regarding to forward looking
statements.
How much revenue will Brokat generate in the US?
In Q1/2000 Brokat in combination with Blaze and GemStone generated a total
revenue of US$ 31,1 Mio. According to the pro-forma P&L for CY 1999, we would
have generated approx. 45% of overall revenue in the US.
Filings with the US SEC
BROKAT plans to file a Registration Statement on Form F-4 with the US SEC in
connection with the Blaze transaction. The Form F-4 will contain an exchange
offer prospectus, a proxy statement for Blaze's special meeting and other
documents. Blaze plans to mail the proxy statement/prospectus contained in the
Form F-4 to its stockholders. The Form F-4 and proxy statement/prospectus will
contain important information about BROKAT, Blaze, the Blaze transaction and
related matters. Investors and stockholders should read the proxy
statement/prospectus and the other documents filed with the US SEC in connection
with the Blaze transaction carefully before they make any decision with respect
to the Blaze transaction. A copy of the merger agreement with respect to the
Blaze transaction has been filed by Blaze as an exhibit to its Form 8-K dated
June 20, 2000. The Form F-4, the proxy statement/prospectus, the Form 8-K and
all other documents filed with the US SEC in connection with the transaction
will be available when filed free of charge at the US SEC's web site at
www.sec.gov. In addition, the proxy statement/prospectus, the Form 8-K and all
other documents filed with the US SEC in connection with the Blaze transaction
will be made available to investors free of charge by calling or writing to:
Brokat Infosystems AG
Silke Simon
Head of Investor Relations
Industriestr.3
70565 Stuttgart, Germany
Phone: +49-711-78844 298
Email: [email protected]
Blaze Software, Inc.
Gary Shroyer
Investor Relations Department
150 Almaden Blvd.
San Jose, CA 951134
(408) 535-1757
In addition to the Form F-4, the proxy statement/prospectus and the other
documents filed with the US SEC in connection with the Blaze transaction, Blaze
is obligated to file annual, quarterly and special reports, proxy statements and
other information with the US SEC. You may read and copy any reports, statements
and other information filed with the US SEC at the US SEC's public reference
rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the other public
reference rooms in New York, New York and Chicago, Illinois. Please call the US
SEC at 1-800-SEC-0330 for further information on public reference rooms. Filings
with the US SEC also are available to the public from commercial
document-retrieval services and at the web site maintained by the US SEC at
http//www.sec.gov.
Solicitation of Proxies; Interests of Certain Persons in the Transaction
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The identity of the people who, under SEC rules, may be considered "participants
in the solicitation" of Blaze stockholders in connection with the proposed
merger, and a description of their interests, is available in an SEC filing on
Schedule 14A made by Blaze on June 21, 2000.
Forward-Looking Statements
This release contains statements that constitute forward looking statements
within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
Forward looking statements are statements other than historical information or
statements of current condition. These statements appear in a number of places
in this release and include statements concerning the parties' intent, belief or
current expectations regarding future events, including: the transactions; other
transactions to which the parties may be a party; competition in the industry;
changing technology and future demand for products; changes in business strategy
or development plans; ability to attract and retain qualified personnel;
worldwide economic and business conditions; regulatory, legislative and judicial
developments; financing plans; and trends affecting the parties' financial
condition or results of operations. Forward looking statements are not
guarantees of future performance and involve risks and uncertainties, and actual
results may differ materially from those in the forward looking statements as a
result of various factors. Although management of the parties believe that their
expectations reflected in the forward looking statements are reasonable based on
information currently available to them, they cannot assure you that the
expectations will prove to have been correct. Accordingly, you should not place
undue reliance on these forward looking statements. In any event, these
statements speak only as of the date of this release. The parties undertake no
obligation to revise or update any of them to reflect events or circumstances
after the date of this release, or to reflect new information or the occurrence
of unanticipated events. Readers are referred to Blaze's Annual Report to
Stockholders and BROKAT's and Blaze's other filings with the US SEC for a
discussion of these and other important risk factors concerning the parties and
their respective operations.
