Filed by Computer Associates International, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14d-2
of the Securities Exchange Act of 1934
Subject Company: Sterling Software, Inc.
Commission File No. 001-08465
Contacts: Bob Gordon, public relations Doug Robinson, investor relations
(631) 342-2391 (631) 342-2745
[email protected] [email protected]
COMPUTER ASSOCIATES COMMENCES TENDER OFFER
FOR STERLING SOFTWARE, INC.
ISLANDIA, N.Y., February 22, 2000--Computer Associates International, Inc.
(NYSE: CA) announced that it commenced today, through Silversmith Acquisition
Corp. (Silversmith), a wholly-owned subsidiary of CA, a tender offer to acquire
all of the outstanding shares of Sterling Software, Inc. (NYSE: SSW) common
stock (including the associated rights).
The offer is being made pursuant to the Agreement and Plan of Merger dated as of
February 14, 2000 among CA, Silversmith and Sterling Software, Inc. It is
conditioned, among other things, upon obtaining necessary regulatory approvals
and at least a majority of the total number of outstanding Sterling Software
shares on a fully diluted basis being tendered and not withdrawn as of the date
the offer expires. The offer is scheduled to expire at midnight New York City
time, on March 20, unless the offer is extended.
The $4 billion stock-for-stock acquisition, which would be the largest ever in
the history of the software industry, has been approved unanimously by the
Boards of Directors of both Sterling Software and CA. The acquisition is
expected to be accretive to CA's earnings per share, excluding any one-time
research and development charge and amortization of acquisition intangibles. The
acquisition will be accounted for using the purchase method.
Under terms of the tender offer, CA will exchange 0.5634 shares of CA stock for
each outstanding Sterling Software share. The exchange ratio is subject to a
collar. If the average of the average trading price of CA stock for the
designated period prior to the closing of the offer is greater than $77.12, the
exchange ratio will be reduced so that each Sterling Software share tendered in
the offer would be exchanged for $43.45 worth of CA stock. If the average of the
average trading price of CA shares for the period is less than $63.10, the
exchange ratio will be increased so that each Sterling Software share tendered
in the offer would be exchanged for $35.55 worth of CA stock. In this case, CA
may at its option reduce the exchange ratio by making up all or part of the
difference in cash. The tender offer will be followed by a back-end merger on
the same terms as those in the offer.
The parties expect the transaction will be one of the first to use the SEC's new
"fast track" exchange offer rules designed to expedite stock-for-stock
transactions.
The acquisition of Sterling Software will extend CA's arsenal of software and
services to build, deploy, manage and secure eBusiness solutions. Sterling
Software solutions are deployed at more than 20,000 customer sites worldwide,
including 90 percent of Fortune 100 companies.
CA is mailing today to registered holders of Sterling Software shares a
preliminary prospectus regarding the exchange offer, accompanied by a letter of
transmittal to be used to tender Sterling Software shares in the exchange offer.
Beneficial owners of Sterling Software shares holding in "street name" through
their brokers may receive the
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prospectus and letter of transmittal from their broker and may contact their
brokers for those documents. In any case, copies of the preliminary prospectus
and letter of transmittal may be requested from our Information Agent, MacKenzie
Partners, Inc., by calling toll free 1-800-322-2885.
Sterling Software is a leading provider of software and services for the
application development, business intelligence, information management, storage
management, network management, VM systems management, and federal systems
markets. The company is one of the 20 largest independent software companies in
the world. Headquartered in Dallas, Sterling Software has a worldwide installed
base of more than 20,000 customer sites and 3,800 employees in 90 offices
worldwide. For more information on Sterling Software, visit the company's Web
site at www.sterling.com.
Computer Associates International, Inc. (NYSE: CA), the world's leading business
software company, delivers the end-to-end infrastructure to enable eBusiness
through innovative technology, services and education. CA has 18,000 employees
worldwide and had revenue of $6.3 billion for the year ended December 31, 1999.
For more information, visit www.ca.com.
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All trademarks, trade names, service marks and logos referenced herein belong to
their respective companies.
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We urge investors and security holders to read the following documents, when
they become available, regarding the exchange offer and the merger (described
above), because they will contain important information:
- - Computer Associates' preliminary prospectus, prospectus supplements, final
prospectus, and tender offer material.
- - Computer Associates' Registration Statement on Form S-4 and Schedule TO
containing or incorporating by reference such documents and other information.
- - Sterling Software's Solicitation/Recommendation Statement on Schedule 14D-9.
These documents and amendments to these documents will be filed with the United
States Securities and Exchange Commission.
When these and other documents are filed with the SEC, they may be obtained free
at the SEC's web site at www.sec.gov. You may also obtain for free each of these
documents (when available) from Computer Associates by directing your request to
Investor Relations at www.ca.com/invest/questions or by fax at 631-342-6864, or
from Sterling Software by directing your request to [email protected] or by
fax at (214) 981-1215.
This press release contains forward-looking statements, including statements
concerning the business, future financial position, results of operations,
business strategy, earnings, and other benefits of our proposed business
combination and plans and objectives of management for future operations of
Computer Associates and Sterling Software. Forward-looking statements involve
risks and uncertainties that could cause actual results to differ materially
from those projected.
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Statements regarding the expected benefits of our proposed business combination
with Sterling Software are based on expectations that Computer Associates
believes are reasonable, but we can give no assurance that such expectations
will prove to have been correct. Factors that could cause actual results to
differ materially include, among others:
- - risks, uncertainties and assumptions relating to global economic conditions;
- - market acceptance of competing technologies,
- - the availability and cost of new computer software products,
- - our ability to maintain or increase market share in our core business while
expanding our product base into other markets,
- - increasing dependency on large dollar enterprise transactions with individual
clients
- - our ability to maintain existing relationships with customers,
- - our ability to recruit and retain qualified personnel,
- - the strength of our distribution channels,
- - our ability to effectively manage fixed and variable expense growth relative
to revenue growth,
- - possible disruptions resulting from organizational changes,
- - our ability to effectively integrate acquired products and operations,
including those of the Sterling Software and
- - increasing dependency on lower profit margin businesses, such as professional
services.
These and other risk factors are discussed in more detail in the prospectus. See
"Risk Factors" in the prospectus. Many such factors are beyond our ability to
control or predict. Investors are cautioned not to put undue reliance on
forward-looking statements. We disclaim any intent or obligation to update these
forward-looking statements, whether as a result of new information, future
events or otherwise.
