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Filed by NetIQ Corporation
Pursuant to Rule 425 Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Exchange Act of 1934
Subject Company: Mission Critical Software, Inc.
Commission File No. 000-26205
Monday February 28, 7:16 am Eastern Time
Company Press Release
Mission Critical Software and NetIQ Agree to Merger of Equals
Creates Premier Provider Of Microsoft Windows NT and Windows 2000
eBusiness Infrastructure Management Software Solutions
HOUSTON and SANTA CLARA, Calif.--(BUSINESS WIRE)--Feb. 28, 2000-- Mission
Critical Software, Inc. (Nasdaq:MCSW - news) and NetIQ Corp. (Nasdaq:NTIQ -
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news) today jointly announced a strategic merger of equals to create a
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powerhouse uniquely positioned to provide comprehensive, leading-edge solutions
for managing eBusiness infrastructures and Windows NT- and Windows 2000-based
systems and applications. The agreement, which was unanimously approved by the
boards of directors of both companies, will create a combined company with a
current market value in excess of $2.7 billion. In a separate transaction,
Mission Critical Software has also agreed to acquire Ganymede Software, Inc., a
privately held company that is a leading provider of end-to-end network
performance management software.
The combination of Mission Critical Software and NetIQ brings together two
established leaders in Windows NT and Windows 2000 eBusiness infrastructure
management with market-leading and highly complementary products and a shared
strategic vision. The new company will provide eBusinesses, enterprise customers
and application service providers (ASPs) with the most comprehensive
infrastructure management solutions encompassing administration, directory, and
application performance management.
Michael S. Bennett, currently Mission Critical Software's chairman, president
and chief executive officer, will be executive chairman of the new company, and
Ching-Fa Hwang, currently president and chief executive officer of NetIQ, will
be chief executive officer. Under the terms of a definitive merger agreement,
Mission Critical Software stockholders will receive 0.9413 share of NetIQ common
stock for each Mission Critical Software common share. Each company's
stockholders will receive shares representing about 50 percent of the new
company on a diluted basis. The merger will be accounted for as a purchase and
is expected to be tax-free to the stockholders of both companies. The merger,
which is expected to close during the June 2000 quarter, is subject to
regulatory approvals, approval by the stockholders of both companies, and
customary closing conditions. At the closing of the merger, the companies expect
to create a new corporate name and stock symbol.
"eCommerce is an increasingly pervasive element of our economy, and eBusiness
infrastructure management has become a critical component for success," said
Michael S. Bennett. "Windows
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2000 is clearly poised to be a platform of choice for the new era of eBusiness
and, with this transaction, the combined company will be superbly positioned to
deliver the most comprehensive and scalable solutions for Windows availability,
performance and security for customers."
"This is a tremendously synergistic combination that will deliver strong results
for customers and stockholders," said Ching-Fa Hwang. "By bringing together our
two companies, their complementary product offerings and target markets -- and
by leveraging the combined intellectual property, and financial and human
resources -- we will be able to offer customers the solutions necessary for
comprehensive end-to-end management of their Windows 2000-based infrastructures.
We have a clear vision for smoothly integrating our organizations and are
committed to ensuring that we maximize the potential of what will become the
clear leader in the Windows 2000 systems management and eBusiness infrastructure
management space." Hwang continued, "We believe our organizations are a superb
fit from both a market and cultural standpoint, and we look forward to working
with our new colleagues."
The New Company
The new company will be headquartered in Santa Clara, California with key
executives, development and operational personnel in Houston, Texas. The two
companies had combined revenue of approximately $63 million for the twelve
months ended December 31, 1999 and approximately 375 employees at year-end.
In addition to Bennett and Hwang, other key members of the new company's
executive team are James A. Barth, current chief financial officer of NetIQ, who
will be chief financial officer, Stephen E. Odom, current chief financial and
operating officer at Mission Critical Software, who will be chief operating
officer, and Thomas P. Bernhardt, current chief technology officer of Mission
Critical Software, who will be chief technology officer. The Board of Directors
will be composed of 9 members, 4 each from Mission Critical Software and NetIQ
including Bennett, Hwang, Bernhardt, and one jointly appointed member.
Mission Critical Software was advised in the transaction by Chase H&Q. NetIQ was
advised by Credit Suisse First Boston.
Mission Critical Software Purchasing Ganymede Software, Inc.
Mission Critical Software also announced today that it has entered into a letter
of intent to acquire Ganymede, a recognized leader in end-to-end network
performance management. Under the terms of the agreement, Mission Critical
Software will issue 2.75 million shares and options in a transaction to be
accounted for as a purchase. Based on Mission Critical Software's closing share
price of $62.25 on February 25, 2000, the total value of the transaction would
be approximately $171.2 million. The addition of Ganymede will further enable
the new company to provide customers a comprehensive end-to-end eBusiness
performance management solution to measure transaction performance across all
eBusiness infrastructure components: applications, network, directory, and
servers. Ganymede had revenue of approximately $10 million for the twelve months
ended December 31, 1999.
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Bennett said, "Ganymede is the industry leader in eBusiness network performance
monitoring, and by adding their capabilities to Mission Critical's and NetIQ's
infrastructure, application and system management capabilities, we will be able
to deliver the most comprehensive, end-to-end solution for eBusiness
infrastructure management."
The acquisition of Ganymede is expected to close during the June 2000 quarter,
at or prior to the closing of the merger with NetIQ. Mission Critical Software
was advised by Chase H&Q. Ganymede was advised in the transaction by Robertson
Stephens.
About NetIQ
NetIQ, headquartered in Santa Clara, California with 1999 calendar year revenues
of approximately $29 million, is a leading provider of eBusiness infrastructure
management software that lets organizations optimize the performance and
availability of their Windows NT- and Windows 2000-based systems and
applications such as Microsoft BackOffice, Citrix, Oracle, SAP R/3 and Lotus
Domino. For more information visit the NetIQ Web site at http://www.netiq.com./
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About Mission Critical Software
Mission Critical Software is a leading provider of systems management software
for Windows NT- and Windows 2000-based networks and Internet infrastructures.
The company, with 1999 calendar year revenues of approximately $34 million, is
headquartered in Houston, Texas, and operates regional offices in the U.S.,
Canada and Europe. For more information visit the Mission Critical Software Web
site at http://www.missioncritical.com/.
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About Ganymede
Ganymede, with approximately 80 employees at December 31, 1999, provides
performance management solutions that help IT managers deliver reliable, high-
performance networked applications. Using Ganymede's flagship software products,
Chariot for testing and Pegasus for monitoring, IT managers can understand
networked application performance from the end user's perspective. Ganymede is
based in Raleigh, N.C. For more information visit the Ganymede Web site at
http://www.ganymede.com./
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All referenced product names are trademarks of their respective companies.
With the exception of the historical data contained herein, this press release
is comprised of statements relating to future results of the companies that are
"forward looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. The companies' actual future results could differ materially
from the results discussed herein. Factors that could cause or contribute to
such differences include the risks inherent in acquisitions of technology
businesses including the failure of the transactions to close due to regulatory
obstacles or other factors, the successful integration of the companies, the
timing and successful completion of technology and product development, our
ability to retain and hire key executives, technical personnel and other
employees, changing relationships with customers, suppliers and strategic
partners, unanticipated costs associated with integration activities, as well as
customer acceptance of new product offerings, and competition in the companies'
various product lines. For a more complete
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discussion of risks and uncertainties see the section entitled "Risk Factors" in
Mission Critical Software's reports on form 10-Q as filed with the Securities
and Exchange Commission.
NetIQ Corporation, its officers and directors may be deemed to be participants
in the solicitation of proxies from NetIQ's shareholders with respect to the
transactions contemplated by the merger agreement. Information regarding such
officers and directors is included in NetIQ's S-1 Registration Statement filed
with the SEC on November 15, 1999, and subsequently amended. This document is
available free of charge at the SEC website at www.sec.gov and from the NetIQ
Corporation contact listed below.
Mission Critical Software, its officers and directors may be deemed to be
participants in the solicitation of proxies from Mission Critical shareholders
with respect to the transactions contemplated by the merger agreement.
Information regarding such officers and directors is included in Mission
Critical's S-1 Registration Statement filed with the SEC on October 25, 1999,
and subsequently amended. This document is available free of charge at the SEC
website at www.sec.gov and from the Mission Critical contact listed below.
SHAREHOLDERS OF MISSION CRITICAL AND OTHER INVESTORS ARE URGED TO READ THE PROXY
STATEMENT-PROSPECTUS WHICH WILL BE INCLUDED IN THE REGISTRATION STATEMENT ON
FORM S-4 TO BE FILED BY NETIQ CORPORATION, INC. IN CONNECTION WITH THE MERGER
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. AFTER SUCH DOCUMENT IS FILED, IT
WILL BE AVAILABLE FREE OF CHARGE ON THE SEC WEBSITE AT WWW.SEC.GOV AND FROM
NETIQ CORPORATION AND MISSION CRITICAL SOFTWARE THROUGH THE CONTACTS LISTED
BELOW.
Contacts:
For Mission Critical Software:
Susan Torrey, Press & Investor Relations, 713.548.1863,
mailto:[email protected]
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Steve Odom, Chief Financial Officer, (713) 548-1829,
mailto:[email protected]
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For NetIQ:
Debra Randall, Investor Relations, 408-330-7116, mailto:[email protected]
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Laurie Chun, Public Relations, 408-330-7113, mailto:[email protected]
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Jim Barth, Chief Financial Officer, 408-354-3956, mailto:[email protected]
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For Ganymede:
Katherine Demacopoulos, Public Relations, 919-469-0997 x325,
mailto:[email protected]
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