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[SAPIENS LOGO] [NESS LOGO]
FOR ADDITIONAL INFORMATION
Dan Falk Yaron Polak
Chief Executive Officer Chief Executive Officer
Sapiens International Ness Technologies Inc.
Tel: +972-8-938-2877 Tel: +972-3-766-6805
E-mail: [email protected] E-mail: [email protected]
SAPIENS AND NESS TECHNOLOGIES ANNOUNCE MERGER
Combination Creates a Global IT Services and Solutions Provider - Number One
Player in the Israeli Market -- Positioned for International Growth
Sapiens International Corporation N.V. (NASDAQ: SPNS), a global e-business
solutions provider, and Ness Technologies, Inc. ("Ness"), a privately held IT
services provider, today announced that they have entered into a definitive
merger agreement.
The merger will create a powerful IT solutions organization with strong
international operations and over 3,000 employees. The combined company will
offer a broad range of IT services and "new economy" e-business solutions based
on world-class solutions technologies and methodologies. The merger will also
enhance and expand the combined company's domain expertise in areas such as
insurance, banking and financial services, supply chain and telecommunications.
Under the terms of the agreement, Sapiens will issue 2.1 shares of Sapiens
common stock for each issued and outstanding share of common and preferred stock
of Ness. In the aggregate, Sapiens will issue approximately 40.9 million shares
and assume options and warrants covering approximately 16.2 million shares. Upon
consummation of the merger, current Sapiens shareholders will own approximately
one-third, while Ness shareholders will own approximately two-thirds of the
combined company.
Management of both companies believe that significant operational and revenue
synergies will be achieved through incremental revenues, cost savings and
utilization of combined resources in fiscal year 2001 and beyond. Sapiens
expects the merger to be accretive to its fiscal 2001 reported earnings,
excluding one-time charges associated with the merger, and significantly
accretive to earnings excluding one-time charges and existing goodwill
amortization of both companies.
The transaction is intended to qualify as a pooling-of-interests for accounting
purposes. As part of the merger, Sapiens will change its jurisdiction of
incorporation to Delaware and adopt the Ness name. Shares of the combined entity
will continue to be traded on NASDAQ's National Market List. The transaction is
expected to close in the first quarter of 2001, subject to customary closing
conditions including regulatory approvals and approval by the shareholders of
both companies.
Mr. Yaron Polak, who is currently President and CEO of Ness, and Mr. Aharon
Fogel, who is currently Chairman of the Board of Ness, will assume the positions
of President and CEO and Chairman of the Board, respectively, of the combined
company. Mr. Dan Falk, who is currently President and CEO of Sapiens, will
assume the position of President of the combined entity's international
operations and will be named to the Executive Committee of the Board of
Directors of the combined company. Mr. Ron Zuckerman, who is currently Chairman
of the Board of Sapiens, will serve as a member of the Board of Directors of the
combined entity.
Significant shareholders of the new entity will include the Wolfson Group and
E.M. Warburg Pincus & Co.
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The Board of Directors of Sapiens has approved the merger and recommended that
Sapiens shareholders vote in favor of the merger. A meeting of Sapiens
shareholders to consider the transaction will be held following the preparation
and distribution of proxy materials.
Lehman Brothers is advising Sapiens on the transaction and has provided a
fairness opinion to the Board of Directors of Sapiens with respect to the
fairness, from a financial point of view, of the exchange ratio. Salomon Smith
Barney, a division of Citigroup, is advising Ness on the transaction and has
provided a fairness opinion to the Board of Directors of Ness. ING Barings is
also acting as an advisor to Ness in connection with the merger.
"This is a natural merger of two almost perfectly complementary organizations in
a way that will create exciting and far-reaching opportunities for the combined
company," said Yaron Polak, Ness' President and Chief Executive Officer. "Ness'
powerful IT organization and project methodologies, coupled with Sapiens' strong
international presence and complementary e-business solutions, position us as a
global services provider that will enable large enterprises to meet the changing
IT demands of the new economy."
Dani Falk, President and Chief Executive Officer of Sapiens, added: "We believe
that this merger will better position us to provide our shareholders with the
type of value that we have been striving to achieve. By merging with Ness, we
envision a powerful combined company that will have the critical mass,
technological depth and financial resources to create significant worldwide
growth opportunities in the future."
A conference call to discuss the merger announcement will be held on September
18th, 2000 at 11:30 AM (EST). To participate in the conference call please dial:
+1-212-896-6003.
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About Sapiens
Sapiens International Corporation N.V. (NASDAQ: SPNS) is a global e-business
solutions provider. Sapiens delivers strategic end-to-end solutions that enable
customers to capitalize on their information technology assets in the transition
to e-business. Sapiens' e-commerce solutions, such as eMerge Loan, eMerge Insure
and eMerge Supply Chain, as well as its cross-industry offerings, such as eMerge
and EuroMigration, apply new business models and processes in the emerging,
dynamic world of e-business and help clients meet the challenges of euro
migration and reengineering. Applying its technologies, Sapiens strives to
ensure fast time-to-market and responsiveness to change. Sapiens serves its
customer base directly and through partnerships with such industry leaders as
Cap Gemini, CSC, IBM and KPMG. Sapiens' installed base of customers includes 3M,
Air France, Argos, Bosch, Groupe Andre, Honda, IBM, International Paper,
Principal Financial, Siemens Energy and Automation and other multinational
corporations.
You are invited to visit us on the World Wide Web at http://www.sapiens.com.
About Ness
Ness Technologies, Inc., whose principal shareholders are the Wolfson Group and
E.M. Warburg Pincus & Co, has developed, through a series of acquisitions, into
a global, end-to-end IT solutions provider. Ness, which is currently the largest
provider of IT services in Israel, has a blue-chip customer base that includes
hundreds of leading organizations in Israel's private, government and military
sectors. Ness' customers include Israel's leading banks, insurance companies and
cellular providers, Visa, Bezeq, Israel Aircraft Industries, the Ministry of
Defense and many of Israel's premier hi-tech companies, including Amdocs,
Checkpoint and Comverse. Its strategic marketing alliances and partnerships
include relationships with SAP, Sybase, InterShop, Alcatel, Siemens, Microsoft,
Compaq and Raytheon. Ness reported audited revenues of $98.1 million for the
year ended December 31, 1999 and unaudited revenues of $83.9 million for the
six-month period ended June 30, 2000.
You are invited to visit us on the World Wide Web at http://www.ness.com.
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Except for historical information contained herein, the matters set forth in
this release are forward-looking statements that are dependent on certain risks
and uncertainties, including, among others, risks associated with achieving a
successful integration of the respective operations of the two companies and
thereby achieving the benefits of the transaction; the failure of the combined
organization to retain key personnel; the impact that competitive forces in the
marketplace could have on the ability of the parties to achieve the expected
financial and operating results and synergies; and the risk that unanticipated
events and circumstances may occur rendering the transaction less beneficial.
Factors affecting the business of the two parties generally include, among
others, market acceptance, market demand, pricing, changing regulatory
environment, changing economic conditions, risks in new product and service
development, the effect of the Company's accounting policies and other risk
factors detailed in the Company's SEC filings. Accordingly, actual results may
differ materially from those anticipated.
