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Please Contact:
Rosemary Stone Stuart McGill
Director, Corporate Communications Manager, Corporate Communications
Micro Focus Micro Focus
U.S.: (650) 404-7180 UK: (1635) 326 46
Giles Sanderson/Edward Bridges
Financial Dynamics
UK: (0171) 831-3113
MICRO FOCUS ANNOUNCES AGREEMENT TO ACQUIRE XDB SYSTEMS
Acquisition adds key enterprise access technology skills
LONDON and MOUNTAIN VIEW, Calif., December 23, 1997 -- Micro Focus Group
Plc (NASDAQ:MIFGY), a leading provider of enterprise application development
solutions, today announced it has entered into a definitive agreement to acquire
privately held XDB Systems, Inc., a provider of DB2 database development,
maintenance and connectivity solutions.
Micro Focus is acquiring XDB Systems to meet the demand for DB2 products
from its markets among large banks and financial institutions, insurance
companies, telecommunications and government organizations. DB2 is used to store
and retrieve key financial data, customer information and manufacturing data on
mainframe systems. The combination of XDB and Micro Focus will allow a tight
integration of the two companies' product offerings.
"Our continuing drive to deliver customer satisfaction through integrated
solutions will be furthered by our ability to integrate XDB Systems products
with our current solutions and sales channels," stated CEO Martin Waters. "We
believe that the database technology and the people responsible for creating
that technology at XDB Systems will enhance many future product offerings for
Micro Focus customers as well."
XDB Systems President Duncan McClain added, "Micro Focus and XDB have
already built a solid working relationship over the past eight years. Our mutual
customers will benefit from having a single provider to turn to for solutions
that help them preserve their valuable information assets on the mainframe while
exploiting new technologies like the Internet."
Industry analysts predict the amount of data stored in DB2 databases will
double over the next two years. IBM, a major supplier of DB2 products, estimates
such database servers are currently in use in 80 percent of today's Fortune 500
companies with these installations supporting 30 million users.
Under the terms of the agreement, Micro Focus will provide to the holders
of XDB shares Micro Focus ordinary shares based on a formula which values XDB at
$13.4 million, and further consideration of $3.1 million which reflects certain
assets of XDB. The value of shares to be issued will be calculated by reference
to the mid-market price of Micro Focus ordinary shares in the 30 trading days
prior to the closing; if the transaction were closed today, it would result in
the issue of approximately 483,000 shares, including up to 52,000 ordinary
shares to be issued to holders of options in XDB Systems upon exercise of such
options. For its year ended January 31, 1997, XDB reported revenue of $10.1
million and a loss of $3.2 million and had assets of $13.1 million. It is
expected that the transaction, which will be accounted for as a pooling of
interests for U.S. accounting purposes, will be closed on January 15, 1998,
following the satisfaction of certain closing conditions. If the transaction
closes as anticipated, various transaction expenses will be included in the
Company's results for the period ending January 31, 1998. Application will be
made to the London Stock Exchange for the new shares to be admitted to the
Official List. The new shares will rank pari passu in all respects with the
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existing ordinary share capital of the Company. It is expected that trading in
the new shares will commence on January 16, 1998.
Both companies help corporations and government agencies develop and
maintain their mainframe applications by utilizing personal computers to perform
editing, compilation, debug and test tasks. This method -- called "off-loading"
- -- is recognized as an extremely cost-effective and productive way to implement
new, or upgrade existing software programs.
ABOUT MICRO FOCUS
Micro Focus (NASDAQ:MIFGY) provides applications development and
maintenance solutions for managing enterprise computing assets. The Company's
state-of-the-art programming solutions allow application developers to:
- move application development and maintenance off the mainframe to
cost-effective PC platforms;
- extend their enterprise applications by developing and deploying
production systems in distributed environments such as UNIX and
Windows/NT;
- and find, fix and test required Year 2000 date and Euro currency
changes.
Micro Focus is located at 701 E. Middlefield Road, Mountain View, Calif.
94043; telephone 650-938-3700. In the UK, the Company is located at The Lawn,
22-30 Old Bath Road, Newbury, Berkshire, RG14 1QN; telephone 01635 32646. For
additional information on Micro Focus and its products, visit the Company's Web
site: http://www.microfocus.com.
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Micro Focus is a registered trademark of Micro Focus. All other companies and
products as they appear in this release are trademarks of their respective
owners.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Micro Focus Group Public Limited Company
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(Registrant)
Date: December 23, 1997 By: /s/ Loren E. Hilllberg
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Loren E. Hillberg, Secretary
