<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934
VIASOFT, INC.
(Name of Subject Company)
VIASOFT, INC.
(Name of Co-Offeror and Issuer)
COMMON STOCK, $0.001 PAR VALUE
(Title of Class of Securities)
92552U-10-2
(CUSIP Number of Class of Securities)
CATHERINE HARDWICK, ESQ.
4343 E. CAMELBACK ROAD, SUITE 205
PHOENIX, ARIZONA 85018
TELEPHONE: (602) 667-2812
FACSIMILE: (602) 667-4233
(Name, address, and telephone numbers of person
authorized to receive notices and
communications on behalf of filing person)
With copies to:
WILLIAM M. HARDIN, ESQ.
RONDA R. BECKERLEG, ESQ.
JENNIFER S.E. DORRIS, ESQ.
OSBORN MALEDON, P.A.
2929 NORTH CENTRAL AVENUE, SUITE 2100
PHOENIX, ARIZONA 85012-2794
TELEPHONE: (602) 640-9000
FACSIMILE: (602) 640-9050
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
<S> <C> <C>
$155,653,952.00 N/A
</TABLE>
[X] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount previously paid: $31,131.00
Form or registration no.: Schedule TO
Filing party: Allen Systems Group, Inc.
ASG Sub, Inc.
Viasoft, Inc.
Date filed: May 4, 2000
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[X] issuer tender offer subject to Rule 13e-4.
[X] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of a tender offer: [ ]
<PAGE> 2
TENDER OFFER
This Tender Offer Statement on Schedule TO (this "Statement") relates
to a tender offer by Viasoft, Inc., a Delaware corporation (the "Company"), made
as part of a combined tender offer with ASG Sub, Inc., a Delaware corporation
("ASG Sub"), a wholly-owned subsidiary of Allen Systems Group, Inc. ("Allen
Systems"), to purchase all of the outstanding shares of common stock, par value
$0.001 per share (the "Common Stock") of the Company, together with the
associated preferred share purchase rights issued pursuant to the Rights
Agreement, dated as of April 20, 1998, as amended between the Company and Harris
Trust and Savings Bank, as Rights Agent (the "Rights" and, together with the
Common Stock, the "Shares"), tendered pursuant to the tender offer at a purchase
price of $8.40 per Share, net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated May
4, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal
(which together with any amendments or supplements thereto, collectively
constitute the "Offer"), copies of which are attached as Exhibits (a)(1) and
(a)(2) to the Tender Offer Statement on Schedule TO originally filed by ASG Sub,
Allen Systems and Viasoft on May 4, 2000 (the "Initial Schedule TO"), which, as
amended as set forth in Amendment No. 1 to the Initial Schedule TO ("Amendment
No. 1 to the Initial Schedule TO") and Amendment No. 2 to the Initial Schedule
TO ("Amendment No. 2 to the Initial Schedule TO"), is hereby expressly
incorporated herein by reference.
The information in the Offer to Purchase, including all schedules and
annexes thereto, as amended as set forth in Amendment No. 1 to the Initial
Schedule TO and Amendment No. 2 to the Initial Schedule TO, is hereby expressly
incorporated herein by reference in response to all the Items of this Statement,
except as otherwise set forth below.
All information contained in the Offer to Purchase concerning ASG Sub
or Allen Systems, including but not limited to information with respect to the
financing to be obtained by Allen Systems in connection with the Offer and
information with respect to the respective directors and executive officers of
Allen Systems and ASG Sub or actions or events with respect to any of them, was
provided by ASG Sub or Allen Systems, respectively, and the Company takes no
responsibility for such information.
ITEM 12. MATERIALS TO BE FILED AS EXHIBITS.
(a)(1)* Offer to Purchase, dated May 4, 2000.
(a)(2)* Solicitation/Recommendation Statement on Schedule 14D-9 of the
Company, dated May 4, 2000.
(a)(3)* Letter of Transmittal.
(a)(4)* Notice of Guaranteed Delivery.
(a)(5)* Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(6)* Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(7)* Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(8)* Text of joint press release issued by Allen Systems and the Company
dated April 27, 2000 (incorporated by reference to the Schedule TO
filed by Allen Systems, ASG Sub and the Company with the Securities
and Exchange Commission on April 28, 2000).
(a)(9)* Form of summary advertisement dated May 4, 2000.
(a)(10) Text of press release issued by Viasoft dated May 25, 2000.
(b)(1)* Credit Agreement, dated as of April 26, 2000, among ASG, ASG Sub,
LaSalle Bank N.A. and KeyBank National Association.
(b)(2)* Commitment Letter, dated April 21, 2000, from LaSalle Bank N.A. and
KeyBank National Association.
<PAGE> 3
(c)* Opinion of Broadview International LLC, dated April 27, 2000
(included as Annex A of the Offer to Purchase as Exhibit (a)(1)).
(c)(2) Fairness Opinion Documentation of Broadview International LLC,
dated April 27, 2000.
(c)(3) Other Potential Offeror Materials.
(d)(1)* Agreement and Plan of Merger, dated as of May 4, 2000, among Viasoft,
Inc., Allen Systems Group, Inc. and ASG Sub, Inc. (included as Annex
C of the Offer to Purchase as Exhibit (a)(1)).
(d)(2)* Confidentiality Agreement, dated March 3, 2000, between Allen Systems
and the Company.
(d)(3)* Confidentiality Agreement, dated March 2, 2000, between Allen Systems
and the Company.
(d)(4)* Shareholder Tender and Voting Agreement, dated as of April 27, 2000,
between ASG Sub and certain shareholders of the Company.
(d)(5)** First Amendment to Agreement and Plan of Merger, dated May 25, 2000
among Viasoft, Inc., Allen Systems Group, Inc. and ASG Sub, Inc.
(e)(1)* Change of Control Separation Plan of the Company dated as of July 14,
1999.
(e)(2)* Amendment to the Company Change in Control Separation Plan, dated as
of April 27, 2000.
(f)* Section 262 of the Delaware General Corporation Law (included as
Annex B to the Offer to Purchase as Exhibit (a)(1)).
(g) None.
(h) Not applicable.
- ---------------------
* Incorporated by reference from the Tender Offer Statement on Schedule
TO filed by Allen Systems Group, Inc., ASG Sub Inc. and Viasoft, Inc.
on May 4, 2000.
** Incorporated by reference from the Amendment No. 2 on Schedule TO filed
by Allen Systems Group, Inc. and ASG Sub, Inc. on May 25, 2000.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
The information in the Offer to Purchase, including all schedules and
annexes thereto, as amended as set forth in Amendment No. 1 to the Initial
Schedule TO and Amendment No. 2 to the Initial Schedule TO, is hereby expressly
incorporated by reference in response to all of the Items required by Schedule
13E-3 that are not included or covered by the Items in the Initial Schedule TO.
<PAGE> 4
The section of the Offer to Purchase entitled "SPECIAL FACTORS -
Background of the Transactions - Contacts Between Viasoft and Allen Systems" at
page 8 of the offer to Purchase is amended by the addition of the following
at the end of the sixteenth paragraph of such section:
"Broadview provided and reviewed with the Viasoft Board a summary of
publicly available information relating to the Other Potential Offeror,
including product offerings, independent analyst estimates, ownership
and share price data and comparable public company data. This summary
information did not include an opinion or recommendation from
Broadview."
The section of the Offer to Purchase entitled "SPECIAL FACTORS - 3.
OPINION OF FINANCIAL ADVISOR" at page 13 of the Offer to Purchase is amended by
the addition of the following after the fourth paragraph of such section:
"SUMMARY OF VALUATION CONSIDERATIONS
In reviewing the business of Viasoft, along with the current activity
within the information technology ("IT"), communications and media
industries, Broadview identified the following factors which, among
others, may have a material impact on valuation.
FACTORS POSITIVELY AFFECTING THE VALUE OF VIASOFT
LARGE ENTERPRISE CUSTOMER BASE. Viasoft has established a large,
high-profile customer base with over 750 entities under active
maintenance contracts. The majority of the Company's customers are large
enterprises with significant investments in mainframe-based systems.
Viasoft currently has over 550 customers paying maintenance on its
flagship product, Enterprise Systems Workbench (ESW). These customer
relationships provide Viasoft with a recurring revenue stream as well as
a large installed base in which to sell additional products and
services.
LARGE POTENTIAL OPPORTUNITY IN NASCENT APPLICATION MODERNIZATION MARKET.
Despite the movement to next-generation platforms, large enterprises
typically remain highly dependent on mainframe-based applications to
support their business processes. As these companies look to modernize
their mainframe applications to leverage the Internet platform for
e-business (e.g., browser-based user interfaces and integration of
mainframe systems with new Internet applications), Viasoft expects these
organizations to require third-party solutions to assist with the
transition. The Company currently offers a suite of tools and service
offerings used in analyzing mainframe applications and plans to
introduce additional products designed to facilitate the transition of
mainframe code to a componentized, distributed application framework.
This new emerging market provides Viasoft with the opportunity for
renewed revenue growth.
STRONG BALANCE SHEET. As of March 31, 2000, Viasoft had a cash balance
of $88.3 million and no debt. As a result, Viasoft possesses a strong
balance sheet with which to fund investment in the development of new
application modernization tools.
FACTORS NEGATIVELY AFFECTING THE VALUE OF VIASOFT
<PAGE> 5
RAPID HISTORICAL REVENUE DECLINE. Viasoft reported a 39% revenue decline
for the trailing twelve months ending March 31, 2000, and a
year-over-year quarterly revenue decline of 57% for the quarter ending
March 31, 2000. This decline is largely the result of the shift in focus
away from Y2K testing tools and services as the market for these
products and services has been extinguished. The Company's financial
performance in the three quarters ended March 31, 2000 may have also
been negatively impacted by the announced but not completed transaction
with Compuware. In addition to the quarter-over-quarter decline of 54%
in license revenue and 25% in services revenue in the quarter ending
March 31, 2000, the Company also reported a 13% decline in maintenance
revenue, due to a decline in both year 2000 and non-year 2000 product
maintenance revenue. Although both management and an analyst expect
Viasoft to moderately grow revenues in fiscal year 2001, potential
growth will be highly dependent on the Company's ability to rebuild the
sales organization, develop new products to complement its existing
product portfolio, and reverse the decline in maintenance revenue from
existing customers.
STRONG COMPETITION AND NEED FOR GREATER CRITICAL MASS. The enterprise
application development tools market is highly competitive and is
experiencing rapid consolidation. Many of the vendors in this market
have far greater critical mass in sales and marketing, product breadth,
research and development and services capability. In its core non-year
2000 related markets, Viasoft currently competes with vendors such as
IBM, Computer Associates/Sterling Software, Compuware, Merant, and
Microsoft, among others. As large enterprise customers continue to
rationalize the number of strategic software and services vendors from
which they purchase, the Company is experiencing a greater need for
critical mass to compete effectively in this changing market
environment.
DEPENDENCE ON GROWTH OF NASCENT APPLICATION MODERNIZATION MARKET. An
estimated 180 billion lines of COBOL code have been implemented on the
IBM mainframe. While numerous companies rely on these mainframe systems
for mission critical data processing, there is no guarantee of the rate
at which companies will seek to modernize these applications.
Furthermore, it is also undetermined how companies will choose to
modernize their mainframe applications. Companies may choose to
outsource mainframe code modernization to large services organizations
thereby limiting the revenue potential of smaller tools vendors such as
Viasoft. Companies may also choose to replace legacy applications with
"packaged" software, hence obviating the need for modernization tools
that Viasoft plans to offer.
LOSS OF KEY PERSONNEL. Due to the transition in its business model,
Viasoft completed two restructurings during fiscal 1999 and has
experienced higher than historical voluntary turnover among its employee
<PAGE> 6
base and management team. The Company has suffered the loss of over 50%
of its North American sales organization and over 50% of the personnel
in the finance/administration organization, largely as a result of the
announced, but not completed Compuware transaction. Without the benefits
of additional products in the development pipeline, the Company may have
difficulty attracting and retaining key sales personnel. The Company
will also need to recruit key executives including a CFO and senior
management to oversee sales and marketing functions.
PUBLIC ANNOUNCEMENT OF THE COMPUWARE TRANSACTION TERMINATION. The
Company has recently emerged from a six-month process that began with
the announcement of a transaction with Compuware on July 14, 1999 and
concluded with a public announcement of a termination on January 18,
2000. As a result of this process, the Company has been adversely
impacted by loss of key personnel, delays of customer orders, slowdown
of development projects and exposure to one of the Company's larger
competitors. While these factors have visibly impacted recent financial
results, the Company's future growth may also be negatively impacted.
SUMMARY OF FINANCIAL ANALYSES"
The section of the Offer to Purchase entitled "SPECIAL FACTORS - 2.
RECOMMENDATION OF THE VIASOFT BOARD; FAIRNESS OF THE TRANSACTION" at page 10 of
the Offer to Purchase is amended by adding the following before the first
paragraph of such section:
"THE BOARD OF DIRECTORS OF VIASOFT HAS UNANIMOUSLY APPROVED THE
OFFER, THE MERGER AND THE MERGER AGREEMENT AND HAS DETERMINED THAT THE
TERMS OF EACH ARE ADVISABLE AND FAIR TO, AND IN THE BEST INTERESTS OF,
VIASOFT AND ITS SHAREHOLDERS, AND RECOMMENDS THAT SHAREHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER."
The last sentence of subclause (2) of the section of the Offer to
Purchase entitled "SPECIAL FACTORS - 2. RECOMMENDATION OF THE VIASOFT BOARD;
FAIRNESS OF THE TRANSACTION" at page 11 of the Offer to Purchase is amended to
read as follows:
"In particular, the Board noted that the $8.40 per Share cash
consideration represents a premium of approximately 53% over the $5.50
per Share closing price on the Nasdaq National Market on April 26, 2000,
the last full trading day before the Board met to determine the final
terms of the Merger Agreement and a premium of 26.8% over the $6.63 per
Share closing price on the twentieth trading day prior to such
determination. The Viasoft Board also noted that approximately 1.8
<PAGE> 7
million Shares were purchased by the Company during the last two fiscal
years at an average purchase price of $8.63 per Share, but did not
consider this information to be as material to its determination as the
more recent trading prices, due in part to the adverse effects of more
recent developments on its business, such as the terminated Compuware
transaction, winding down of the market for Viasoft's year 2000 products
and services and risks associated with the announced reorganization of
its business. See "SPECIAL FACTORS - 11. Transactions and Arrangements
Concerning Shares.""
The subclause (8) of the section of the Offer to Purchase entitled
"SPECIAL FACTORS - 2. RECOMMENDATION OF THE VIASOFT BOARD; FAIRNESS OF THE
TRANSACTION" at page 11 of the Offer to Purchase is amended to read as follows:
"(10) Alternatives to the Merger. The Viasoft Board evaluated
possible alternatives to the Offer and the Merger. The Viasoft Board
considered the proposal of the Other Potential Offeror and regarded it
as significantly inferior to the Offer and Merger for many reasons,
including the size and financial resources of the Other Potential
Offeror, the volatility and relative lack of liquidity of its common
stock and the risk these factors entailed in view of the Other Potential
Offeror's requirement that a majority of the per share consideration be
paid in common stock rather than cash. The Viasoft Board also considered
continuing to seek additional proposals from other parties and accepting
the related uncertainties (including with respect to timing, valuation
and the likelihood of completion of any such proposals that might be
received) and concluded that the risks outweighed the potential benefits
of this alternative in light of the unsuccessful recent discussions with
other potential acquirors discussed above and the fact that no other
unsolicited indications of interest were received following the
highly-publicized termination of the Compuware Merger Agreement. The
Viasoft Board further considered continuing to maintain Viasoft as an
independent public corporation and not engaging in any extraordinary
transaction. In that connection, the Viasoft Board reviewed Viasoft's
prospects if it were to remain independent, including the risks and
benefits inherent in remaining independent and in particular, the risks
associated with the rebuilding of the business required after
termination of the Compuware Merger Agreement and viasoft's previously
announced reorganization of its business. Ultimately, this alternative
was rejected based on an evaluation of all of the information and
factors summarized above and the Viasoft Board's determination that such
information and factors favored approval of the Offer and the Merger
when weighed against the risks and uncertainties of continuing as an
independent public company."
The subclause (9) of the section of the Offer to Purchase entitled
"SPECIAL FACTORS - 2. RECOMMENDATION OF THE VIASOFT BOARD; FAIRNESS OF THE
TRANSACTION" at page 11 of the Offer to Purchase is amended to be subclause (8).
<PAGE> 8
The section of the Offer to Purchase entitled "SPECIAL FACTORS - 2.
RECOMMENDATION OF THE VIASOFT BOARD; FAIRNESS OF THE TRANSACTION" at page 11 of
the Offer to Purchase is amended to include the following subclause (9):
"(9) Prior Compuware Offer. The Viasoft Board considered the
fairness of the Offer and the Merger in relation to the $9.00 offer made
pursuant to the Compuware Merger Agreement, noting in particular recent
developments, such as the adverse effects of the terminated Compuware
transaction, described under "SPECIAL FACTORS - 1. Background of the
Transaction," the end of the market for Viasoft's year 2000 products and
services and risks associated with the reorganization of its business.
The section of the Offer to Purchase entitled "SPECIAL FACTORS - 2.
RECOMMENDATION OF THE VIASOFT BOARD; FAIRNESS OF THE TRANSACTION" at page 11 of
the Offer to Purchase is amended to include the following additional paragraphs
following subclause (10):
The Viasoft Board considered the going concern value of the
Company in evaluating the Offer and the Merger in part by reference to
multiples of earnings and revenue set forth in the Broadview financial
analysis. The Viasoft Board noted that the Offer Price represents a
premium over the median multiples of trailing 12 months net income,
projected June 30, 2000 net income and earnings for comparable
companies. The Viasoft Board understood that valuation and revenue
growth rates are positively correlated in the software industry and
noted that while the Offer Price is below the median multiples of
trailing 12 months revenue, projected June 30, 2000 revenue and revenue
for comparable companies, the revenue growth rates for Viasoft for the
12 months ended March 30, 2000 and June 30, 2000 (projected) are
negative (39.4%) and (45.3%), respectively, compared to median revenue
growth rates for comparable companies of 6.3% and 10.5%, respectively,
for such periods. The Viasoft Board did not consider the Company's net
book value or liquidation value because such values were believed not to
be material indicators of the Company's value as a going concern.
The Viasoft Board also considered as factors that potentially
weighed against the Offer and the Merger the potential risks and
detriments of the Offer and the Merger, including (1) the fact that as a
result of the Offer and the Merger, the existing stockholders of the
Company would be unable to benefit from any future growth of the
Company, (2) the fees and expenses required to be paid by the Company by
the terms of the Merger Agreement upon certain terminations of the
Merger Agreement which, among other things, would make it more costly
for another potential bidder to propose an acquisition of the Company on
a basis that would be superior to that contemplated by the Merger
Agreement and (3) the conditions relating to the obligations of the
lenders under the Credit Agreement to provide the funding necessary for
Allen
<PAGE> 9
Systems to consummate the Offer and the Merger and to pay related fees
and expenses."
<PAGE> 10
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
VIASOFT, INC.
By: /s/ Steven D. Whiteman
--------------------------------------
Name: Steven D. Whiteman
Title: Chairman of the Board and Chief
Executive Officer
Date: May 25, 2000
<PAGE> 11
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
(a)(1)* Offer to Purchase, dated May 4, 2000.
(a)(2)* Solicitation/Recommendation Statement on Schedule 14D-9 of the
Company, dated May 4, 2000.
(a)(3)* Letter of Transmittal.
(a)(4)* Notice of Guaranteed Delivery.
(a)(5)* Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(6)* Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(7)* Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(8)* Text of joint press release issued by Allen Systems and the Company
dated April 27, 2000 (incorporated by reference to the Schedule TO
filed by Allen Systems, ASG Sub and the Company with the Securities
and Exchange Commission on April 28, 2000).
(a)(9)* Form of summary advertisement dated May 4, 2000.
(a)(10) Text of press release issued by Viasoft dated May 25, 2000.
(b)(1)* Credit Agreement, dated as of April 26, 2000, among ASG, ASG Sub,
LaSalle Bank N.A. and KeyBank National Association.
(b)(2)* Commitment Letter, dated April 21, 2000, from LaSalle Bank N.A. and
KeyBank National Association.
(c)* Opinion of Broadview International LLC, dated April 27, 2000
(included as Annex A of the Offer to Purchase as Exhibit (a)(1)).
(c)(2) Fairness Opinion Documentation of Broadview International LLC, dated
April 27, 2000.
(c)(3) Other Potential Offeror Materials.
(d)(1)* Agreement and Plan of Merger, dated as of May 4, 2000, among Viasoft,
Inc., Allen Systems Group, Inc. and ASG Sub, Inc. (included as Annex
C of the Offer to Purchase as Exhibit (a)(1)).
(d)(2)* Confidentiality Agreement, dated March 3, 2000, between Allen Systems
and the Company.
(d)(3)* Confidentiality Agreement, dated March 2, 2000, between Allen Systems
and the Company.
(d)(4)* Shareholder Tender and Voting Agreement, dated as of April 27, 2000,
between ASG Sub and certain shareholders of the Company.
(d)(5)** First Amendment to Agreement and Plan of Merger, dated May 25, 2000,
among Viasoft, Inc., Allen Systems Group, Inc. and ASG Sub, Inc.
(e)(1)* Change of Control Separation Plan of the Company dated as of July 14,
1999.
(e)(2)* Amendment to the Company Change in Control Separation Plan, dated as
of April 27, 2000.
(f)* Section 262 of the Delaware General Corporation Law (included as
Annex B to the Offer to Purchase as Exhibit (a)(1)).
(g) None.
(i) Not applicable.
- ---------------------
* Incorporated by reference from the Tender Offer Statement on Schedule
TO filed by Allen Systems Group, Inc., ASG Sub Inc. and Viasoft, Inc.
on May 4, 2000.
** Incorporated by reference from the Amendment No. 2 on Schedule TO filed
by Allen Systems Group, Inc. and ASG Sub, Inc. on May 25, 2000.
<PAGE> 1
EXHIBIT (a)(10)
CONTACTS:
Steven D. Whiteman
Chairman, President and CEO
Viasoft, Inc.
602-952-0050
FOR IMMEDIATE RELEASE
VIASOFT ANNOUNCES POSTPONEMENT OF 1999 ANNUAL MEETING OF STOCKHOLDERS
PHOENIX, ARIZ. (MAY 25, 2000) - Viasoft, Inc. (Nasdaq NM: VIAS)
announced today that Viasoft's Annual Meeting of Stockholders for 1999, which
was scheduled for May 31, 2000, is being postponed while the recently-announced
joint tender offer by a subsidiary of Allen Systems Group, Inc. and Viasoft is
pending. At this time, Viasoft has not made plans to reschedule the meeting.
ABOUT VIASOFT
Viasoft is a leader in understanding enterprise applications to help
companies realize the greatest return on their information technology
investments. The Company provides business solutions consisting of specialized
professional services and award-winning software, designed to enable customers
worldwide to cost-effectively manage and evolve their information technology
assets. Headquartered in Phoenix, Ariz., Viasoft provides sales and professional
services through regional offices in the United States, Europe, Australia and a
network of international distributors. For more information on Viasoft's
services and technology, please visit the Company's World Wide Web site at
www.viasoft.com.
###
Certain statements in this press release are forward-looking
statements, which are based on current expectations and are subject to a number
of risks and uncertainties that could cause actual results to differ materially
from any expected future results, expressed or implied, by the forward-looking
statements. Interested parties should refer to the disclosure set forth in
Viasoft's recent public filings for additional information regarding risks
affecting Viasoft's financial condition and results of operations. Viasoft does
not assume any responsibility to update any of the forward-looking statements
contained herein.
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF
AN OFFER TO SELL SHARES OF VIASOFT TO ALLEN SYSTEMS GROUP, INC., ASG SUB, INC.
OR VIASOFT. VIASOFT AND ALLEN SYSTEMS GROUP, INC. HAVE FILED TENDER OFFER
STATEMENTS AND VIASOFT HAS FILED A SOLICITATION/RECOMMENDATION STATEMENT WITH
RESPECT TO THE OFFER WITH THE U.S. SECURITIES AND
<PAGE> 2
EXCHANGE COMMISSION. WE HAVE ALSO MAILED COPIES TO VIASOFT SHAREHOLDERS.
VIASOFT SHAREHOLDERS SHOULD READ THE TENDER OFFER STATEMENTS AND THE
SOLICITATION/RECOMMENDATION STATEMENT BECAUSE THEY CONTAIN IMPORTANT INFORMATION
THAT SHAREHOLDERS SHOULD CONSIDER BEFORE DECIDING WHETHER TO TENDER THEIR
SHARES. YOU CAN GET THE TENDER OFFER STATEMENTS AND OTHER FILED DOCUMENTS FOR
FREE AT THE SEC'S INTERNET SITE (www.sec.gov). YOU CAN ALSO OBTAIN COPIES OF THE
THESE DOCUMENTS FOR FREE FROM KRISTINE KENNEDY RIEGER, SENIOR VICE PRESIDENT,
SECRETARY AND GENERAL COUNSEL OF ALLEN SYSTEMS GROUP, INC. BY CALLING
914/435-2302, OR FROM CATHERINE R. HARDWICK, VICE PRESIDENT AND GENERAL COUNSEL
OF VIASOFT, BY CALLING 602/952-0050:
- TENDER OFFER STATEMENTS (WITHOUT EXHIBITS)
- OFFER TO PURCHASE
- LETTER OF TRANSMITTAL
- NOTICE OF GUARANTEED DELIVERY
<PAGE> 1
EXHIBIT (c)(2)
<PAGE> 2
VIASOFT, INC.
FAIRNESS OPINION DOCUMENTATION
APRIL 27, 2000
BROADVIEW INT'L LLC
Tokyo Silicon Valley New York Boston London
<PAGE> 3
CONFIDENTIAL
------------
VIASOFT, INC.
FAIRNESS OPINION DOCUMENTATION
Table of Contents
<TABLE>
<CAPTION>
TAB
---
<S> <C>
Fairness Opinion Letter 1
Valuation Considerations 2
Summary Explanation of Valuation Methodology 3
Valuation Analysis 4
</TABLE>
BROADVIEW INT'L LLC
<PAGE> 4
BROADVIEW
April 27, 2000
CONFIDENTIAL
------------
Board of Directors
Viasoft, Inc.
3033 N. 44th St.
Phoenix, AZ 85018-7296
Dear Members of the Board:
We understand that Viasoft, Inc. ("Viasoft" or the "Company"), Allen
Systems Group, Inc. ("Allen Systems") and ASG Sub, Inc. ("Merger Sub") propose
to enter into an Agreement and Plan of Merger (the "Agreement") pursuant to
which (i) Allen Systems will cause Merger Sub to make a tender offer (the "Allen
Systems Offer") to purchase at least a majority of the shares of common stock of
Viasoft ("Viasoft Common Stock") for $8.40 per share (the "Offer Price") and
Viasoft will simultaneously make an offer (the "Viasoft Offer", and together
with the Allen Systems Offer, the "Offer") to purchase all outstanding shares of
Viasoft Common Stock tendered in connection with the Offer and not acquired by
Merger Sub at a price per share equal to the Offer Price and, (ii) subsequently
Merger Sub will be merged with Viasoft (the "Merger"). Pursuant to the Merger,
each issued and outstanding share of Viasoft Common Stock not acquired in the
Offer will be converted into the right to receive an amount of cash equal to the
Offer Price. We understand that the Allen Systems Offer and the Viasoft Offer
will be conducted for practical purposes as a single offer, with shares of
Viasoft Common Stock being purchased according to the order of priority set
forth in the Agreement. The terms and conditions of the above described Offer
and Merger (together the "Transaction") are more fully detailed in the
Agreement.
You have requested our opinion as to whether the Offer Price is fair, from
a financial point of view, to Viasoft shareholders.
Broadview International LLC ("Broadview") focuses on providing merger and
acquisition advisory services to information technology ("IT") companies. In
this capacity, we are continually engaged in valuing such businesses, and we
maintain an extensive database of IT mergers and acquisitions for comparative
purposes. We are currently acting as financial advisor to Viasoft's Board of
Directors and will receive a fee from Viasoft upon the successful conclusion of
the Transaction.
In rendering our opinion, we have, among other things:
1.) reviewed the terms of the Agreement dated April 26, 2000 furnished
to us by Viasoft management on April 26, 2000 which, for the
purposes of this opinion, we have assumed, with your permission, to
be identical in all material respects to the agreement to be
executed except that we have been informed by Viasoft management
that the Offer Price will be $8.40;
2.) reviewed Viasoft's annual report on Form 10-K for its fiscal year
ended June 30, 1999, including the audited financial statements
included therein, and Viasoft's
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financial press release dated April 21, 2000 for the period ended
March 31, 2000, including the unaudited financial statements
included therein;
3.) reviewed certain internal financial and operating information
relating to Viasoft, including certain quarterly projections through
June 30, 2001, prepared and furnished to us by Viasoft management;
4.) participated in discussions with Viasoft management concerning the
operations, business strategy, current financial performance and
prospects for Viasoft;
5.) discussed with Viasoft management its view of the strategic
rationale for the Transaction;
6.) reviewed the recent reported closing prices and trading activity for
Viasoft Common Stock;
7.) compared certain aspects of the financial performance of Viasoft
with public companies we deemed comparable;
8.) analyzed available information, both public and private, concerning
other mergers and acquisitions we believe to be comparable in whole
or in part to the Transaction;
9.) reviewed recent equity research analyst reports covering Viasoft;
10.) assisted in negotiations and discussions related to the Transaction
among Viasoft, Allen Systems and their respective financial and
legal advisors; and
11.) conducted other financial studies, analyses and investigations as we
deemed appropriate for purposes of this opinion.
In rendering our opinion, we have relied, without independent verification,
on the accuracy and completeness of all the financial and other information
(including without limitation the representations and warranties contained in
the Agreement) that was publicly available or furnished to us by Viasoft. With
respect to the financial projections examined by us, we have assumed that they
were reasonably prepared and reflected the best available estimates and good
faith judgments of the management of Viasoft as to the future performance of
Viasoft. We have neither made nor obtained an independent appraisal or valuation
of any of Viasoft assets.
Based upon and subject to the foregoing, we are of the opinion that the
Offer Price is fair, from a financial point of view, to Viasoft shareholders.
For purposes of this opinion, we have assumed that Viasoft is not currently
involved in any material transaction other than the Transaction and those
activities undertaken in the ordinary course of conducting its business. Our
opinion is necessarily based upon market, economic, financial and other
conditions as they exist and can be evaluated as of the date of this opinion,
and any change in such conditions may impact this opinion.
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This opinion speaks only as of the date hereof. It is understood that this
opinion is for the information of the Board of Directors of Viasoft in
connection with its consideration of the Transaction and does not constitute a
recommendation to any Viasoft shareholder as to whether such shareholder should
tender its shares in the Offer or as to how such shareholder should vote on the
Merger. This opinion may not be published or referred to, in whole or part,
without our prior written permission, which shall not be unreasonably withheld.
Broadview hereby consents to references to, and the inclusion of, this opinion
in its entirety in the Schedules TO to be filed in connection with the Offer,
and the Solicitation/Recommendation Statement on Schedule 14D-9 and Proxy
Statement to be distributed to Viasoft shareholders in connection with the
Transaction.
Sincerely,
/s/ Broadview International LLC
Broadview International LLC
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VIASOFT, INC. FAIRNESS OPINION
VALUATION CONSIDERATIONS
In reviewing the business of Viasoft, Inc. ("Viasoft" or the "Company"), along
with the current activity within the Information Technology ("IT"),
Communications and Media industries, we have identified the following factors
which, among others, may have a material impact on valuation.
FACTORS POSITIVELY AFFECTING THE VALUE OF VIASOFT
LARGE ENTERPRISE CUSTOMER BASE - Viasoft has established a large, high-profile
customer base with over 750 entities under active maintenance contracts
including Caterpillar, MCI WorldCom, IBM, State of California and National
Westminster Bank. The majority of the Company's customers are large enterprises
with significant investments in mainframe-based systems. Viasoft currently has
over 550 customers paying maintenance on its flagship product, Enterprise
Systems Workbench (ESW). These customer relationships provide Viasoft with a
recurring revenue stream as well as a large installed base in which to sell
additional products and services.
LARGE POTENTIAL OPPORTUNITY IN NASCENT APPLICATION MODERNIZATION MARKET -
Despite the movement to next-generation platforms, large enterprises typically
remain highly dependent on mainframe-based applications to support their
business processes. As these companies look to modernize their mainframe
applications to leverage the Internet platform for e-business (e.g.,
browser-based user interfaces and integration of mainframe systems with new
Internet applications), Viasoft expects these organizations to require
third-party solutions to assist with the transition. The Company currently
offers a suite of tools and service offerings used in analyzing mainframe
applications and plans to introduce additional products designed to facilitate
the transition of mainframe code to a componentized, distributed application
framework. This new emerging market provides Viasoft with the opportunity for
renewed revenue growth.
STRONG BALANCE SHEET - As of March 31, 2000, Viasoft had a cash balance of $88.3
million and no debt. As a result, Viasoft possesses a strong balance sheet with
which to fund investment in the development of new application modernization
tools.
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FACTORS NEGATIVELY AFFECTING THE VALUE OF VIASOFT
RAPID HISTORICAL REVENUE DECLINE - Viasoft reported a 39% revenue decline for
the trailing twelve months ending March 31, 2000, and a year-over-year quarterly
revenue decline of 57% for the quarter ending March 31, 2000. This decline is
largely the result of the shift in focus away from Y2K testing tools and
services as the market for these products and services has been extinguished.
The Company's financial performance in the last three quarters may have also
been negatively impacted by the announced, but not completed transaction with
Compuware. In addition to the quarter-over-quarter decline of 54% in license
revenue and 25% in services revenue in the quarter ending March 31, 2000, the
Company also reported a 13% decline in maintenance revenue, due to a decline in
both Y2K and non-Y2K product maintenance revenue. Although both management and
an analyst expect Viasoft to moderately grow revenues in fiscal year 2001,
potential growth will be highly dependent on the company's ability to rebuild
the sales organization, develop new products to complement its existing product
portfolio, and reverse the decline in maintenance revenue from existing
customers.
STRONG COMPETITION AND NEED FOR GREATER CRITICAL MASS - The enterprise
application development tools market is highly competitive and is experiencing
rapid consolidation. Many of the vendors in this market have far greater
critical mass in sales and marketing, product breadth, research and development
and services capability. In its core non-Y2K related markets, Viasoft currently
competes with vendors such as IBM, Computer Associates/Sterling Software,
Compuware, Merant, and Microsoft, among others. As large enterprise customers
continue to rationalize the number of strategic software and services vendors
from which they purchase, the Company is experiencing a greater need for
critical mass to compete effectively in this changing market environment.
DEPENDENCE ON GROWTH OF NASCENT APPLICATION MODERNIZATION MARKET - Gartner Group
estimates that over 180 billion lines of COBOL code have been implemented on the
IBM mainframe. While it is a fact that numerous companies rely on these
mainframe systems for mission critical data processing, there is no guarantee of
the rate at which companies will seek to modernize these applications.
Furthermore, it is also undetermined how companies will choose to modernize
their mainframe applications. Companies may choose to outsource mainframe code
modernization to large services organizations such as EDS thereby limiting the
revenue potential of smaller tools vendors such as Viasoft. Companies may also
choose to replace legacy applications with "packaged" software, hence obviating
the need for modernization tools that Viasoft plans to offer.
LOSS OF KEY PERSONNEL - Due to the transition in its business model, Viasoft
completed two restructurings during fiscal 1999 and has experienced higher than
historical voluntary turnover among its employee base and management team. The
Company has suffered the loss of over 50% of its North American sales
organization and over 50% of the personnel in the finance/administration
organization, largely as a result of the announced, but not
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completed Compuware transaction. Without the benefits of additional products in
the development pipeline, the Company may have difficulty attracting and
retaining key sales personnel. The Company will also need to recruit key
executives including a CFO and senior management to oversee sales and marketing
functions.
PUBLIC ANNOUNCEMENT OF THE COMPUWARE TRANSACTION TERMINATION - The Company has
recently emerged from a six-month process that began with the announcement of a
transaction with Compuware on July 14, 1999 and concluded with a public
announcement of a termination on January 18, 2000. As a result of this process,
the Company has been adversely impacted by loss of key personnel, delays of
customer orders, slowdown of development projects and exposure to one of the
Company's larger competitors. While these factors have visibly impacted recent
financial results, the Company's future growth may also be negatively impacted.
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VIASOFT, INC. FAIRNESS OPINION
SUMMARY EXPLANATION OF
VALUATION METHODOLOGY
The following is a summary explanation of the various sources of information and
valuation methodologies employed by Broadview Int'l LLC ("Broadview") in valuing
Viasoft, Inc. ("Viasoft" or the "Company") in conjunction with rendering its
fairness opinion regarding the transaction with Allen Systems Group, Inc.
("Allen Systems"). Broadview employed analyses based on: (1) public company
comparables, (2) transaction comparables, (3) transaction premiums paid; (4)
stock price performance to determine the fairness of the Transaction; and (5)
present value of future share price.
PUBLIC COMPANY COMPARABLES ANALYSIS - Ratios of a Company's Common Stock Share
Price and Equity Market Capitalization ("EMC"), adjusted for cash and debt when
appropriate, to selected historical and projected operating metrics indicate the
value public equity markets place on companies in a particular market segment.
Several companies are comparable to Viasoft based on revenue growth, revenue
size, products offered, business model and management structure. Broadview
reviewed nine public company comparables in the analysis, design and modeling,
development management, application construction and data management market
segments with Trailing Twelve Month ("TTM") revenue between $35 million and $500
million, and TTM Revenue Growth less than 20%, from a financial point of view
including each company's: TTM Revenue; TTM Revenue Growth; TTM Earnings Before
Interest and Taxes ("TTM EBIT") Margin, Projected 6/30/2000 ("Projected 2000")
Revenue; Projected 6/30/00 Revenue Growth; Net Cash; Equity Market
Capitalization; Total Market Capitalization ("TMC" defined as Equity Market
Capitalization plus debt minus cash)/TTM Revenue ("TTM TMC/R") ratio; TMC/TTM
EBIT ("TTM TMC/EBIT") ratio; Price/TTM EPS ("TTM P/E") ratio; TMC/Projected
6/30/2000 Revenue ratio ("Projected 2000 TMC/R"); and Price/Projected 6/30/2000
EPS ratio ("Projected 6/30/2000 P/E"). The public company comparables were
selected from the Broadview Barometer, a proprietary database of publicly-traded
Information Technology ("IT"), Communications and Media companies maintained by
Broadview and broken down by industry segment.
In order of descending TTM TMC/R, the public company comparables consist of:
1) ILOG SA;
2) eXcelon Corp.;
3) Centura Software Corp.;
4) Saga Systems, Inc.;
5) Progress Software Corp.;
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6) Crystal Systems Solutions Ltd.;
7) Pervasive Software, Inc.;
8) MERANT plc; and
9) Rogue Wave Software, Inc.
These comparables exhibit the following medians and ranges for revenue growth:
<TABLE>
<CAPTION>
Median Growth Rate Range of Growth Rates
<S> <C> <C>
TTM Revenue Growth 6.3 % (14.4) % - 19.6 %
Projected 6/30/2000 10.5 % (10.4) % - 21.5 %
Revenue Growth
</TABLE>
Viasoft's TTM revenue growth was (39.4)%. Viasoft management's projection for
6/30/2000 revenue growth is (45.3)%. The external research analyst projections
for Viasoft's 6/30/2000 revenue growth is (45.3)%.
These comparables exhibit the following medians and ranges for the applicable
multiples:
<TABLE>
<CAPTION>
Median Multiple Range of Multiples
<S> <C> <C>
TTM TMC/R 1.81 x 0.44 x - 8.49 x
TTM TMC/EBIT 17.97 x 7.08 x - 32.81 x
TTM P/E 33.95 x 12.37 x - 46.73 x
Projected 2000 TMC/R 1.55 x 0.44 x - 7.37 x
(Management Projections)
Projected 2000 TMC/R 1.55 x 0.44 x - 7.37 x
(Analyst Projections)
Projected 2000 P/E 27.34 x 11.26 x - 126.17 x
(Management Projections)
Projected 2000 P/E
(Analyst Projections) 27.34 x 11.26 x - 126.17 x
</TABLE>
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These comparables imply the following medians and ranges for per share value:
<TABLE>
<CAPTION>
Implied Median Range of Implied Values
Value
<S> <C> <C>
TTM TMC/R $11.55 $6.44 - $36.48
TTM TMC/EBIT NM NM - NM
TTM P/E $ 2.86 $1.04 - $ 3.93
Projected 2000 TMC/R $ 9.59 $6.14 - $27.59
(Management Projections)
Projected 2000 TMC/R $ 9.59 $6.14 - $27.60
(Analyst Projections)
Projected 2000 P/E $ 1.38 $0.57 - $ 6.39
(Management Projections)
Projected 2000 P/E $ 0.12 $0.05 - $ 0.55
(Analyst Projections)
</TABLE>
TRANSACTION COMPARABLES ANALYSIS - Ratios of Equity Purchase Price, adjusted for
the seller's cash and debt when appropriate, to selected historical operating
metrics indicate the value strategic and financial acquirers have been willing
to pay for companies in a particular market segment. A handful of companies
involved in recent transactions are comparable to Viasoft based on products
offered and business model. Broadview reviewed twelve comparable merger and
acquisition ("M&A") transactions from January 1, 1998 through April 26, 2000
involving sellers in the analysis, design and modeling, development management,
application construction, and data management market segments, with TTM revenue
between $35 million and $500 million, from a financial point of view including
each transaction's: Adjusted Price (Equity Price plus debt minus cash); Seller
TTM Revenue; Adjusted Price/TTM Revenue ("P/R") ratio; Adjusted Price/EBIT
(Earnings Before Interest and Taxes); and Equity Price/Net Income. Transactions
were selected from Broadview's proprietary database of published and
confidential M&A transactions in the IT, Communications and Media industries. In
order of descending P/R multiple, the transactions used are the acquisition of:
1) Forte Software, Inc. by Sun Microsystems, Inc.;
2) Ardent Software, Inc. by Informix Corp.;
3) Inprise Corp. by Corel Corp.;
4) Logic Works, Inc. by Platinum Technology, Inc.;
5) Intersolv, Inc. by Micro Focus Group plc;
6) Information Advantage, Inc. by Sterling Software, Inc.;
7) Template Software by Level 8 Systems, Inc.;
8) Synon Corp. by Sterling Software, Inc.;
9) Prism Solutions, Inc. by Ardent Software, Inc.;
10) SEER Technologies, Inc. by Level 8 Systems, Inc.;
11) Red Brick Systems, Inc by Informix Corp.; and
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12) Cayenne Software, Inc. by Sterling Software, Inc.
These comparables exhibit the following median and range for the applicable
multiple:
<TABLE>
<CAPTION>
Median Multiple Range of Multiples
<S> <C> <C>
P/R 1.62 x 0.22 x - 6.19 x
P/EBIT 29.05 x 18.92 x - 29.45 x
P/Net Income 32.75 x 21.31 x - 46.27 x
</TABLE>
These comparables imply the following median and range for per share value:
<TABLE>
<CAPTION>
Median Implied Range of Implied Values
Value
<S> <C> <C>
P/R $ 10.83 $ 5.61 - $27.87
P/EBIT NM NM - NM
P/Net Income $ 2.76 $ 1.79 - $ 3.90
</TABLE>
TRANSACTION PREMIUMS PAID ANALYSIS - Premiums paid above the seller's EMC
indicate the additional value, when compared to public shareholders, strategic
and financial acquirers are willing to pay for companies in a particular market
segment. In this analysis, the value of consideration paid in transactions
involving stock is computed using the buyer's last reported closing price (on
the appropriate exchange) prior to announcement. The seller's equity market
capitalization one trading day prior to announcement is calculated using the
seller's last reported closing price (on the appropriate exchange) prior to
announcement. The seller's equity market capitalization twenty trading days
prior to announcement is calculated using the seller's closing price (on the
appropriate exchange) on the first day of that period which: (1) consists of
twenty consecutive days during which the appropriate exchange conducts trading
activity, and (2) ends on the day of the last reported closing price prior to
announcement. Broadview reviewed 47 comparable M&A transactions involving North
American software vendors from January 1, 1998 through April 26, 2000 with
equity consideration between $50 million and $250 million. Transactions were
selected from Broadview's proprietary database of published and confidential M&A
transactions in the IT, Communications and Media industries. In order of
descending premium paid to seller's equity market capitalization 20 trading days
prior to the date of announcement, the software transactions used were the
acquisition of:
1) FullTime Software, Inc. by Legato Systems, Inc.;
2) Marcam Solutions, Inc., by Invensys plc (pending);
3) Sulcus Hospitality Technologies Corp. by Eltrax Systems, Inc.;
4) Netmoves Corp. by Mail.com, Inc.;
5) Connectinc.com by Calico Commerce, Inc.;
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6) Consilium, Inc. by Applied Materials, Inc.;
7) Worldtalk Communications Corp. by Tumbleweed Communications Corp.;
8) Cybermedia, Inc. by Network Associates, Inc.;
9) Interlink Computer Sciences by Sterling Software, Inc.;
10) Telebackup Systems, Inc. by VERITAS Software Corp.;
11) Oshap Technologies, Ltd. By Sunguard Data Systems, Inc.;
12) Softworks, Inc. by EMC Corp.;
13) C*ATS Software, Inc. by Misys plc;
14) Metrowerks, Inc. by Motorola, Inc.;
15) US Servis, Inc. by HBO & Company;
16) OrCAD, Inc. by Cadence Design Systems, Inc.;
17) Wall Data, Inc. by Netmanage, Inc.;
18) Inference Corp. by Egain Communications Corp.;
19) Caere Corp. by Scansoft, Inc.;
20) FDP Corp. by SunGard Data Systems, Inc.;
21) Elite Information Group, Inc. by Solution 6 Holdings, Inc.;
22) Information Advantage, Inc. by Sterling Software, Inc.;
23) Logic Works, Inc. by PLATINUM Technology, Inc.;
24) Ultradata Corp by CFI Proservices, Inc.;
25) Award Software by Phoenix Technologies, Ltd.;
26) Advanced Communication Systems, Inc. by Titan Corp.;
27) Walsh International, Inc. by Cognizant Corp.;
28) Oacis Healthcare Holdings Corp. by Science Applications
International Corp.;
29) Globalink, Inc. by Lernout & Hasupie Speech Products NV;
30) THINK New Ideas, Inc. by Answer Think Consulting Group, Inc.;
31) Xionics Document Technologies, Inc. by Oak Technology, Inc.;
32) Learmonth & Burchett Management Systems, Inc. by PLATINUM
Technology, Inc.
33) PC DOCS Group International, Inc. by Hummingbird Communications,
Ltd.(pending);
34) IQ Software Corp. by Information Advantage Software, Inc.;
35) Voice Control Systems, Inc. by Philips Electronics NV(pending);
36) State Of The Art, Inc. by Sage Group plc;
37) Mosaix, Inc. by Lucent Technologies, Inc.(pending)
38) Quarterdeck Corp. by Symantec Corp.;
39) International Telecommunication Data Systems, Inc. by Amdocs, Ltd.;
40) Innovative Technologies Systems, Inc. by Peregrine Systems, Inc.;
41) SPR, Inc. by Leapnet, Inc.;
42) GRC International, Inc. by AT&T Corp.;
43) DataWorks Corp. by Platinum Software Corp.;
44) Equitrac Corp. by MOB (Cornerstone Equity Investors LLC);
45) Simulation Sciences, Inc. by Siebe plc;
46) Enterprise Software, Inc. by Livewire Media LLC;
47) FTP Software, Inc. by NetManage, Inc.
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These comparables exhibit the following medians and ranges for the applicable
premiums (discounts):
<TABLE>
<CAPTION>
Median Multiple Range of Multiples
<S> <C> <C>
Premium Paid to 24.3% (6.3%) - 186.6%
Seller's EMC 1
Trading Day Prior to
Announcement
Premium Paid to 53.8% (28.7%) - 326.6%
Seller's EMC 20
Trading Days Prior to
Announcement
</TABLE>
These comparables imply the following medians and ranges for per share value:
<TABLE>
<CAPTION>
Median Implied Range of Implied Values
Value
<S> <C> <C>
Premium Paid to $ 6.83 $ 5.15 - $ 15.76
Seller's per Share
Value 1 Trading Day
Prior to Announcement
Premium Paid to $ 10.19 $ 4.72 - $ 28.26
Seller's per Share
Value 20 Trading Days
Prior to Announcement
</TABLE>
VIASOFT STOCK PERFORMANCE ANALYSIS - For comparative purposes, Broadview
examined the following:
1) Viasoft Common Stock weekly historical volume and trading prices
from 4/23/99 through 4/20/00; and
2) Daily relative closing prices for an index of the public company
comparables vs. Viasoft and the S&P 500 from 4/23/99 through
4/20/00.
PRESENT VALUE OF POTENTIAL FUTURE SHARE PRICE ANALYSIS - Broadview calculated
the present value of the potential future price of shares of Viasoft Common
Stock on a standalone basis using a selected analyst estimate for the twelve
months ending June 30, 2001. In performing the analysis, Broadview assumed that
the median TTM P/E multiple for the public company comparables would remain
constant going forward. The implied share price calculated using the median TTM
P/E for the public company comparables, adjusted for median implied value from
the public company comparables and transaction
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comparables, and discounted based on the Capital Asset Pricing Model ("CAPM")
using the median capital-structure adjusted beta for the public company
comparables is $10.88.
CONSIDERATION OF THE DISCOUNTED CASH FLOW VALUATION METHODOLOGY - While
discounted cash flow is a commonly used valuation methodology, Broadview did not
employ such an analysis for the purposes of this opinion. Discounted cash flow
analysis is most appropriate for companies which exhibit relatively steady or
somewhat predictable streams of future cash flow. For company a such as Viasoft,
a preponderance of the value in a valuation based on discounted cash flow will
be in the terminal value of the entity, which is extremely sensitive to
assumptions about the sustainable long-term growth rate of the company. Given
the uncertainty in estimating both the future cash flows and a sustainable
long-term growth rate for the Company, Broadview considered a discounted cash
flow analysis inappropriate for valuing Viasoft.
SUMMARY OF VALUATION ANALYSES - Taken together, the information and analyses
employed by Broadview lead to Broadview's overall opinion that the Offer Price
is fair from a financial point of view, to Viasoft shareholders.
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Viasoft, Inc.
Fairness Opinion
Valuation Analysis
Prepared For: Viasoft, Inc.
Board of Directors
Prepared By: Broadview Int'l LLC
April 27, 2000
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Viasoft, Inc. Fairness Opinion
Valuation Analysis
Table of Contents
<TABLE>
<CAPTION>
Tab Page
<S> <C>
Transaction Summary A
Transaction Description and Consideration Value
Valuation Analysis B
Offer Analysis
Valuation Summary
Graphical Valuation Summary
Viasoft Public Comparable Analyses C
Public Company Comparables Summary
Public Company Comparables Descriptions
M&A Transaction Analyses D
M&A Transaction Comparables
Premium Analysis
Potential Share Price Analysis E
Potential Share Price Analysis for Viasoft
Discount Rate Calculation
Viasoft Stock Performance Analyses F
Viasoft Trading History
Index of Public Company Comparables vs. Viasoft and the S&P 500
Summary of Viasoft Share Data G
Calculation of Shares to be Acquired
</TABLE>
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NEW YORK FAIRNESS OPINION
FINANCIAL ANALYSIS
SILICON VALLEY
Prepared For
BOSTON Viasoft Board of Directors
LONDON April 27, 2000
TOKYO
BROADVIEW INT'L LLC
MEMBER NASD
MEMBER SIPC
BROADVIEW
<PAGE> 20
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TRANSACTION DESCRIPTION AND
CONSIDERATION VALUE
- --------------------------------------------------------------------------------
TRANSACTION DESCRIPTION
- --------------------------------------------------------------------------------
We understand that Viasoft, Inc. ("Viasoft" or the "Company"), Allen Systems
Group, Inc. ("Allen Systems") and ASG Sub, Inc. ("Merger Sub") propose to enter
into an Agreement and Plan of Merger (the "Agreement") pursuant to which (i)
Allen Systems will cause Merger Sub to make a tender offer (the "Allen Systems
Offer") to purchase at least a majority of the shares of common stock of Viasoft
("Viasoft Common Stock") for $8.40 per share (the "Offer Price") and Viasoft
will simultaneously make an offer (the "Viasoft Offer", and together with the
Allen Systems Offer, the "Offer") to purchase all outstanding shares of Viasoft
Common Stock tendered in connection with the Offer and not acquired by Merger
Sub at a price per share equal to the Offer Price and, (ii) subsequently Merger
Sub will be merged with Viasoft (the "Merger"). Pursuant to the Merger, each
issued and outstanding share of Viasoft Common Stock not acquired in the Offer
will be converted into the right to receive an amount of cash equal to the Offer
Price. We understand that the Allen Systems Offer and the Viasoft Offer will be
conducted for practical purposes as a single offer, with shares of Viasoft
Common Stock being purchased according to the order of priority set forth in the
Agreement.
The terms and conditions of the above described Offer and Merger (together the
"Transaction") are more fully detailed in the Agreement.
CONSIDERATION VALUE
- --------------------------------------------------------------------------------
($Thousands Except Share and Per Share Data)
<TABLE>
<S> <C>
COMMON SHARES OUTSTANDING AS OF 3/31/00 (1) 18,092
COMMON EQUIVALENTS (2) 345
- --------------------------------------------------------------------------------
TOTAL DILUTED SHARES OUTSTANDING 18,437
VIASOFT SHARES TO BE ACQUIRED 18,437
OFFER PRICE PER SHARE $ 8.40
CONSIDERATION TO BE PAID TO VIASOFT SHAREHOLDERS $154,868
- --------------------------------------------------------------------------------
IMPLIED EQUITY VALUE OF VIASOFT $154,868
BALANCE SHEET ADJUSTMENT (3) $ 88,323
IMPLIED ENTITY VALUE $ 66,545
- --------------------------------------------------------------------------------
</TABLE>
Notes:
(1) Reported by Viasoft in their 4/21/00 press release.
(2) Derived using the Treasury Stock Method. Option information provided by
Viasoft Management as of 4/10/00.
(3) As of 3/31/00, the Company had $88.32MM in cash and $0.00MM in debt,
yielding a net balance sheet adjustment of $88.32MM.
BROADVIEW 2
<PAGE> 21
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VIASOFT VALUATION
Offer Analysis
($Thousands Except Per Share Data)
<TABLE>
<S> <C>
- --------------------------------------------------------------------------
Implied Entity Value $ 66,545
Balance Sheet Adjustment $ 88,323
Implied Equity Value $154,868
Implied Equity Value Per Share (1) $ 8.40
- --------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Multiple or
Premium Median
Applicable Balance Sheet Implied By Range of Multiple
Methodology Viasoft Figure Adjustment (2) Offer Multiples or Premiums or Premium
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Public Company Comparables
Multiple of Trailing Twelve Months Revenue $ 68,792 $ 88,323 0.97 0.44x - 8.49x 1.81x
Multiple of Trailing Twelve Months EBIT ($ 2,236) $ 88,323 NM 7.08x - 32.81x 17.97x
Multiple of Trailing Twelve Months Net Income $ 1,552 $ 0 99.79 12.37x - 46.73x 33.95x
Multiple of Projected 6/30/00 Revenue
(Management Projections) $ 57,072 $ 88,323 1.17 0.44x - 7.37x 1.55x
Multiple of Projected 6/30/00 Revenue
(Analyst Projections) $ 57,088 $ 88,323 1.17 0.44x - 7.37x 1.55x
Multiple of Projected 6/30/00 Net Income
(Management Projections) $ 934 $ 0 NM 11.26x - 126.17x 27.34x
Multiple of Projected 6/30/00 Net Income
(Analyst Projections) $ 80 $ 0 NM 11.26x - 126.17x 27.34x
Transaction Comparables
Multiple of Revenue for Comparable Public
and Private Companies $ 68,792 $ 88,323 0.97 0.22x - 6.19x 1.62x
Multiple of EBIT for Comparable Public
and Private Companies ($ 2,236) $ 88,323 NM 18.92x - 29.45x 29.05x
Multiple of Earnings for Comparable Public
and Private Companies $ 1,552 $ 0 99.79 21.31x - 46.27x 32.75x
Premium to Market Value 1 Day Prior to
Announcement $ 5.50 52.7% (6.3%) - 186.6% 24.3%
Premium to Market Value 20 Days Prior to
Announcement $ 6.63 26.8% (28.7%) - 326.6% 53.8%
</TABLE>
<TABLE>
<CAPTION>
Range of Share Prices Share Price
Share Price Implied By Range of Implied By
Current Viasoft Implied By P/Es and Discount Median P/E of
Share Price Offer Factors (3) Comparables(4)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Future Potential Share Price Analysis
Present Value of Future Potential Share
Prices $ 5.50 $8.40 $5.82 - $14.33 $10.88
</TABLE>
Notes:
(1) Per share calculations assume 18.4MM diluted Viasoft shares outstanding.
(2) As of 3/31/00, the Company had $88.32MM in cash and $0.00MM in debt,
yielding a net balance sheet adjustment of $88.32MM. Balance sheet
adjustment is applied only to revenue based analyses.
(3) Using discount rates ranging from 11.0% to 26.0% and P/E ratios ranging
from 20.5 to 43.0.
(4) Using a discount rate of 14.5% (calculated using CAPM and the median
capital structure adjusted betas of the public company comparables).
BROADVIEW 3
<PAGE> 22
CONFIDENTIAL
VIASOFT VALUATION
Valuation Summary
($Thousands Except Per Share Data)
<TABLE>
<S> <C>
- ---------------------------------------------------
Implied Entity Value $ 66,545
Balance Sheet Adjustment $ 88,323
Implied Equity Value $154,868
Implied Equity Value Per Share(1) $ 8.40
- ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Implied Value
Equity Value
Median Multiple Applicable Balance Sheet From Median
Methodology or Premium Viasoft Figure Adjustment (2) Multiples
- -----------------------------------------------------------------------------------------------------------------------------------
A B D (AxB)+D
<S> <C> <C> <C> <C>
PUBLIC COMPANY COMPARABLES
Multiple of Trailing Twelve Months Revenue 1.81x $68,792 $88,323 $212,893
Multiple of Trailing Twelve Months EBIT (4) 17.97x ($2,236) $88,323 NM
Multiple of Trailing Twelve Months Net Income 33.95x $ 1,552 $ 0 $ 52,687
Multiple of Projected 6/30/00 Revenue
(Management Projections) 1.55x $57,072 $88,323 $176,847
Multiple of Projected 6/30/00 Revenue
(Analyst Projections) 1.55x $57,088 $88,323 $176,872
Multiple of Projected 6/30/00 Net Income
(Management Projections) (4) 27.34x $ 934 $ 0 $ 25,534
Multiple of Projected 6/30/00 Net Income
(Analyst Projections) (4) 27.34x $ 80 $ 0 $ 2,187
TRANSACTION COMPARABLES
Multiple of Revenue for Comparable Public
and Private Companies 1.62x $68,792 $88,323 $199,654
Multiple of EBIT for Comparable Public
and Private Companies 29.05x ($2,236) $88,323 NM
Multiple of Earnings for Comparable Public
and Private Companies 32.75x $ 1,552 $ 0 $ 50,836
Premium to Market Value 1 Day Prior to
Announcement 24.3% $ 5.50 $126,013
Premium to Market Value 20 Days Prior to
Announcement 53.8% $ 6.63 $187,912
FUTURE POTENTIAL SHARE PRICE ANALYSIS
Present Value of Future Potential Share
Prices (3) $200,584
</TABLE>
<TABLE>
<CAPTION>
Implied Per Share
Value From Median
Implied Per Share Value Range Multiples or
Methodology From Multiples or Premiums (1) Premiums (1)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PUBLIC COMPANY COMPARABLES
Multiple of Trailing Twelve Months Revenue $6.44 - $36.48 $11.55
Multiple of Trailing Twelve Months EBIT (4) NM - NM NM
Multiple of Trailing Twelve Months Net Income $1.04 - $ 3.93 $ 2.86
Multiple of Projected 6/30/00 Revenue
(Management Projections) $6.14 - $27.59 $ 9.59
Multiple of Projected 6/30/00 Revenue
(Analyst Projections) $6.14 - $27.60 $ 9.59
Multiple of Projected 6/30/00 Net Income
(Management Projections) (4) $0.57 - $ 6.39 $ 1.38
Multiple of Projected 6/30/00 Net Income
(Analyst Projections) (4) $0.05 - $ 0.55 $ 0.12
TRANSACTION COMPARABLES
Multiple of Revenue for Comparable Public
and Private Companies $5.61 - $27.87 $10.83
Multiple of EBIT for Comparable Public
and Private Companies NM - NM NM
Multiple of Earnings for Comparable Public
and Private Companies $1.79 - $ 3.90 $ 2.76
Premium to Market Value 1 Day Prior to
Announcement $5.15 - $15.76 $ 6.83
Premium to Market Value 20 Days Prior to
Announcement $4.72 - $28.26 $10.19
FUTURE POTENTIAL SHARE PRICE ANALYSIS
Present Value of Future Potential Share
Prices (3) $5.82 - $14.33 $10.88
</TABLE>
Notes:
(1) Per share calculations assume 18.4MM diluted Viasoft shares outstanding.
(2) As of 3/31/00, the Company had $88.32MM in cash and $0.00MM in debt,
yielding a net balance sheet adjustment of $88.32MM. Balance sheet
adjustment is applied only to revenue based analyses.
(3) Range of implied values calculated using discount rates ranging from 11.0%
to 26.0% and P/E ratios ranging from 20.5 to 43.0. Median implied value
calculated using a discount rate of 14.5% (calculated using CAPM and the
median capital structure adjusted betas of the public company
comparables).
(4) Implied per share value is not meaningful when net margin is less than
than 2% for the relevant statistic.
BROADVIEW 4
<PAGE> 23
CONFIDENTIAL
VIASOFT VALUATION
Summary Analysis
($Thousands Except Per Share Data)
Public Company Comparables
Multiple of Trailing Twelve Months Revenue
Multiple of Trailing Twelve Months Net Income
Multiple of Projected 6/30/00 Revenue
(Management Projections)
Multiple of Projected 6/30/00 Revenue
(Analyst Projections)
Multiple of Projected 6/30/00 Net Income
(Management Projections) (4)
Multiple of Projected 6/30/00 Net Income
(Analyst Projections) (4)
Transaction Comparables
Multiple of Revenue for Comparable Public and
Private Companies
Multiple of Earnings for Comparable Public and
Private Companies
Premium to Market Value 1 Day Prior to
Announcement
Premium to Market Value 20 Days Prior to
Announcement
Future Potential Share Price Analysis
Present Value of Future Potential Share Prices
[Chart]
5
<PAGE> 24
CONFIDENTIAL
Public Company Comparables Analysis
Application Development Tools Companies With TTM Revenue Between $35MM and
$500MM and TTM Revenue Growth Less than 20%
($Thousands Except Per Share Data)
<TABLE>
<CAPTION>
Operating and Valuation Statistics
Projected
Projected 6/30/00
TTM Revenue TTM Revenue TTM EBIT 6/30/00 Revenue Net Cash
Company (1) (2) Growth(2) Margin(2) (Revenue) Growth (Cash - Debt)
- ----------- --- --------- --------- --------- ------ -------------
<S> <C> <C> <C> <C> <C> <C>
ILOG SA [ILOG] 67,255 6.3% (0.6%) 77,531 21.5% 13,126
eXcelon Corp [EXLN] 64,706 3.6% (9.3%) 67,471 9.7% 24,321
Centura Software Corp [CNTR] 51,065 (3.8%) (7.8%) NA NA 18,810
Saga Systems Inc [AGS] 211,239 (14.4%) 9.2% 217,159 (10.4%) 45,946
Progress Software Corp [PRGS] 291,133 15.1% 16.7% 309,826 15.6% 166,147
Crystal Systems Solutions Ltd. [CRYS] 45,907 7.0% 20.4% 51,004 11.2% 28,265
Pervasive Software, Inc. [PVSW] 63,008 19.6% (6.3%) 57,229 (3.7%) 29,660
MERANT plc [MRNT] 364,403 (5.4%) 2.2% 440,058 19.2% 101,497
Rogue Wave Software Inc [RWAV] 53,198 8.9% (1.0%) 53,932 4.3% 34,306
Mean 134,657 4.1% 2.6% 159,276 8.4%
High 364,403 19.6% 20.4% 440,058 21.5%
Median 64,706 6.3% (0.6%) 72,501 10.5%
Low 45,907 (14.4%) (9.3%) 51,004 (10.4%)
VIASOFT (Management Proj.) 68,792 (39.4%) (3.3%) 57,072 (45.3%) 88,323
VIASOFT (Analyst Proj.) 68,792 (39.4%) (3.3%) 57,088 (45.3%) 88,323
</TABLE>
<TABLE>
<CAPTION>
Operating and Valuation Statistics
TTM Projected Projected
Equity Market TTM TMC/R TMC/EBIT TTM P/E 6/30/00 6/30/00
Company (1) Capitalization (2) (3) (2)(3)(4) (2)(4) TMC/R (3) P/E (5)
- ----------- -------------- ------- --------- ------ --------- -------
<S> <C> <C> <C> <C> <C> <C>
ILOG SA [ILOG] 584,245 8.49 NM NM 7.37 126.17
eXcelon Corp [EXLN] 276,308 3.89 NM NM 3.73 NM
Centura Software Corp [CNTR] 180,188 3.16 NM NM NA NA
Saga Systems Inc [AGS] 534,244 2.31 25.12 37.93 2.25 34.75
Progress Software Corp [PRGS] 693,336 1.81 10.83 20.69 1.70 19.93
Crystal Systems Solutions Ltd. [CRYS] 94,653 1.45 7.08 12.37 1.30 11.62
Pervasive Software, Inc. [PVSW] 109,816 1.27 NM NM 1.40 NM
MERANT plc [MRNT] 366,163 0.73 32.81 46.73 0.60 11.26
Rogue Wave Software Inc [RWAV] 57,772 0.44 NM 33.95 0.44 60.44
Mean 321,858 2.62 18.96 30.33 2.35 44.03
High 693,336 8.49 32.81 46.73 7.37 126.17
Median 276,308 1.81 17.97 33.95 1.55 27.34
Low 57,772 0.44 7.08 12.37 0.44 11.26
VIASOFT (Management Proj.) 99,506 0.16 NM 64.11 0.20 NM
VIASOFT (Analyst Proj.) 99,506 0.16 NM 64.11 0.20 NM
</TABLE>
Notes:
(1) Valuation information calculated using the closing price on 4/26/00.
Projected financials calculated from selected analyst reports.
(2) period ending 3/31/00.
(3) Total Market Capitalization (TMC) is defined as equity market
capitalization (EMC) plus total debt and preferred stock less cash and
cash equivalents.
(4) Not Meaningful (NM) when margin is less than 2.0%.
(5) Not Meaningful (NM) when relevant or projected figure is less than
zero.
6
<PAGE> 25
CONFIDENTIAL
Descriptions Of Public Company Comparables
<TABLE>
<CAPTION>
Company Description
- ------- -----------
<S> <C>
Centura Software Corp Provides database solutions and the connectivity
products necessary to integrate these solutions
into business systems.
Crystal Systems Develops and markets software tools and provides
Solutions Ltd. consulting services for the implementation of
complex conversion projects primarily for mainframe
computer systems.
eXcelon Corp Provides enterprise and embedded data management
solutions, including object-oriented and XML data
management solutions. Also offers training and
consulting services, as well as maintenance and
support services. Formerly known as Object
Design Inc.
ILOG SA Develops software components for user interface,
resource optimization and data services functions
needed by software developers to build applications.
MERANT plc Supplies enterprise application development products
and services that help customers accelerate the
development, delivery and integration of applications
in multi-platform computing environments. Specific
product offerings include mainframe and client/server
development tools, client/server development management
tools and database connectivity products.
</TABLE>
<TABLE>
<CAPTION>
Company Description
- ------- -----------
<S> <C>
Pervasive Software, Provides database management and application
Inc. deployment tools for packaged applications
and information appliances.
Progress Software Corp Supplies application servers, relational database
management systems and tools for application development
and network, system and application management.
Rogue Wave Software Offers software components for creating and
Inc managing enterprise systems and infrastructure
software for enterprise integration.
Saga Systems Inc Provides mainframe application development and
database products and develops enterprise
application integration software. Also provides related
professional services to large organizations with
complex computing requirements.
</TABLE>
7
<PAGE> 26
CONFIDENTIAL
Selected M&A Transaction Comparables
($Millions)
<TABLE>
<CAPTION>
Announce Seller
Date Buyer Seller Description
- ---- ----- ------ -----------
<S> <C> <C> <C>
8/23/99 Sun Microsystems Inc Forte Software Inc Integrates and develops scalable enterprise-
class distributed applications
12/1/99 Informix Corp Ardent Software Inc Develops, markets, and supports software for
developing, deploying, and maintaining business
applications and data warehousing solutions
2/7/00 Corel Corp Inprise Corp Is a provider of cross-platform software,
software development tools and services that
simplify the complexity of application
development, integration, deployment and
management
3/16/98 Platinum Technology Inc Logic Works Inc Provides windows-based database design and re
engineering S/W for client/server and rdbms
application development
6/17/98 Micro Focus Group Plc Intersolv Inc Offers a package of integrated S/W development
tools that provide end-user query and reporting,
S/W configuration management, application
development, analysis and design, S/W
maintenance and data access
7/16/99 Sterling Software Inc Information Advantage Inc Develops client/server decision support
applications that enable multidimensional
analysis of data warehouses
10/20/99 Level 8 Systems Inc Template Software Provides software solutions to organizations
that require the integration of their operations
and systems to better automate their order
handling and fulfillment, human resource
management, and network monitoring systems
6/22/98 Sterling Software Inc Synon Corp Provides enterprise application development
tools and services for the AS/400 and windows
nt environments; developed an integrated
development environment that supports the
development of large-scale, complex
applications
11/19/98 Ardent Software Inc Prism Solutions Inc Develops, markets and supports data warehouse
management software for delivering business
intelligence application.
11/24/98 Level 8 Systems Inc Seer Technologies Inc Develops, markets and supports componentware
for building network centric computing and
other component based applications for the it
environment
10/7/98 Informix Corp Red Brick Systems Inc Designs, develops, markets and supports a
client/server relational database management
system and related software and services for
data warehouse applications
8/28/98 Sterling Software Inc Cayenne Software Inc Supplies modeling, database design and
development solutions for application and
database development
</TABLE>
<TABLE>
<CAPTION>
Equity
Price/
Adjusted Adjusted Net
Announce Adjusted Seller Price/ Price/ Income
Date Price (1) Revenue Revenue EBIT (2)
- ---- --------- ------- ------- ---- ---
<S> <C> <C> <C> <C> <C>
8/23/99 516.6 83.5 6.19 NM NM
12/1/99 842.1 154.8 5.44 29.45 42.28
2/7/00 894.9 174.81 5.12 NM NM
3/16/98 174.8 50.51 3.46 29.05 46.27
6/17/98 492.1 196.48 2.50 18.92 23.23
7/16/99 132.8 68.2 1.95 NM 21.31
10/20/99 58.5 45.3 1.29 NM NM
6/22/98 72.60 79.60 0.91 NM NA
11/19/98 38.2 46.34 0.83 NM NM
11/24/98 50.7 63.96 0.79 NM NM
10/7/98 13.2 39.85 0.33 NM NM
8/28/98 9.7 44.09 0.22 NM NM
</TABLE>
Mean 2.42 25.80 33.27
High 6.19 29.45 46.27
Median 1.62 29.05 32.75
Low 0.22 18.92 21.31
Notes:
1 Prices paid have been adjusted for cash and debt on the seller's balance
sheet at the time of acquisition if known.
2 Net Income multiples are Not Meaningful (NM) when net income margin is less
than 2.0%
8
<PAGE> 27
CONFIDENTIAL
TRANSACTIONS ANALYSIS
Distribution of Premiums - One Day Prior to Announce
[Chart]
BROADVIEW 9
<PAGE> 28
CONFIDENTIAL
TRANSACTIONS ANALYSIS
Distribution of Premiums - Twenty Days Prior to Announce
[Graph]
BROADVIEW 10
<PAGE> 29
CONFIDENTIAL
PUBLIC SELLER PREMIUM ANALYSIS
Software Transactions With Equity Consideration Between $50 Million and $250
Million at Announcement (1)
Since January 1, 1998
<TABLE>
<CAPTION>
PREMIUM
EQUITY PREMIUM PAID 20
CONSIDERATION PAID ONE TRADING
ANNOUNCE AT DAY BEFORE DAYS BEFORE
DATE BUYER SELLER DESCRIPTION ANNOUNCEMENT ANNOUNCEMENT ANNOUNCEMENT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10/26/98 Legato Systems, Inc. FullTime Software, Inc. Designs, develops and $69.38 186.6% 326.6%
markets high
availability, backup and
recovery management and
security auditing
software Unix and Windows
NT
5/27/99 Invensys PLC Marcam Solutions Provides ERP and $44.34 100.0% 287.1%
enterprise asset
management for industrial
customers
11/12/98 Eltrax Systems, Inc. Sulcus Hospitality Develops installs and $66.01 128.7% 217.6%
Technologies Corp markets managed network
solutions for
enterprise-wide networks
to the hospitality
industry
12/13/99 Mail.com Inc Netmoves Corp Provides enterprise-wide $173.00 79.5% 167.8%
fax solutions which
include
computer-generated
faxing, fax-to-email,
email-to-fax, broadcast
fax, and fax-enabling
e-commerce websites
11/19/99 Calico Commerce Inc Connectinc.com Provides integration $90.00 27.7% 141.2%
solutions to enable its
customers to engage in
internet-based electronic
commerce and extend their
businesses through the
emerging network supply
chain
10/12/98 Applied Materials, Inc. Consilium, Inc. Develops integrated $50.30 173.7% 133.4%
semiconductor
manufacturing execution
systems (MES) software
and services
11/18/99 Tumbleweed Worldtalk Communications Provider of internet $161.85 9.4% 123.0%
Communications Corp Corp security and policy
management solutions,
enabling organizations
to define and manage
internet e-mail and
web security and
usage policies, reducing
the risks associated
with internet
communications
7/28/98 Network Associates, Inc. Cybermedia, Inc. Provider of automatic $129.63 25.6% 117.1%
service and support
software products for
windows-based PC users
3/24/99 Sterling Software, Inc. Interlink Computer Designs, develops and $64.00 21.7% 115.4%
Sciences, Inc. markets software
solutions provide
secure, managed access
to TCP/IP data centers
over public and private
connections.
</TABLE>
BROADVIEW 11
<PAGE> 30
CONFIDENTIAL
PUBLIC SELLER PREMIUM ANALYSIS
Software Transactions With Equity Consideration Between $50 Million and $250
Million at Announcement (1)
Since January 1, 1998
<TABLE>
<CAPTION>
PREMIUM
EQUITY PREMIUM PAID 20
CONSIDERATION PAID ONE TRADING
ANNOUNCE AT DAY BEFORE DAYS BEFORE
DATE BUYER SELLER DESCRIPTION ANNOUNCEMENT ANNOUNCEMENT ANNOUNCEMENT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
9/1/98 VERITAS Software Corp. TeleBackup Systems,Inc. Provides data backup, $76.29 49.5% 113.7%
archiving, and retrieval
solutions
3/10/99 Sungard Data Systems, Oshap Technologies Ltd. Israeli-based group of $210.00 43.7% 101.2%
Inc. technology software firms
12/21/99 EMC Corp Softworks Inc Designs, develops, $192.00 7.4% 95.1%
markets, licenses and
supports a family of
enterprise systems
management software
products for enterprise
computing environments
12/14/98 Misys PLC C*ATS Software, Inc Provides risk management $56.89 60.0% 93.5%
products for financial
institutions
8/19/99 Motorola Inc Metrowerks Inc A computer software $95.00 23.5% 92.3%
development company that
designs, develops,
markets, and supports
software programming
tools
7/20/98 HBO & Company US Servis Inc Provider of outsourcing $50.00 102.4% 91.1%
services to physician
delivery systems and
hospital business offices
6/15/99 Cadence Design Systems, Orcad Develops, markets and $121.18 36.8% 70.5%
Inc. supports software
products that assist
electronics designers in
the management of
component data and in the
design of field-
programmable gate arrays.
10/21/99 Netmanage Inc Wall Data Inc A leader in PC-to-Host $94.00 56.5% 67.4%
communications software
3/16/00 Egain Communications Inference Corp Develops, markets and $78.60 -6.3% 63.5%
Corp supports enterprise
customer relationship
management software
solutions for self-
service and
agent-assisted customer
contact centers to
improve customer care.
1/17/00 Scansoft Inc Caere Corp Designs, develops, $140.00 58.0% 62.1%
manufactures, and markets
optical character
recognition (ocr)
software and hardware for
converting scanned and
faxed images into
computer usable text, as
well as desktop
electronic forms and
information management
products.
</TABLE>
BROADVIEW 12
<PAGE> 31
CONFIDENTIAL
PUBLIC SELLER PREMIUM ANALYSIS
Software Transactions With Equity Consideration Between $50 Million and $250
Million at Announcement (1)
Since January 1, 1998
<TABLE>
<CAPTION>
PREMIUM
EQUITY PREMIUM PAID 20
CONSIDERATION PAID ONE TRADING
ANNOUNCE AT DAY BEFORE DAYS BEFORE
DATE BUYER SELLER DESCRIPTION ANNOUNCEMENT ANNOUNCEMENT ANNOUNCEMENT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1/18/99 SunGard Data Systems, FDP Corp Develops and sells $ 86.21 31.3% 57.2%
Inc. application software
systems that facilitate
the sales, marketing and
administration functions
of life insurance
companies and employee
benefit administrators
12/15/99 Solution 6 Holdings Ltd Elite Information Group Provides a comprehensive $ 95.60 12.1% 57.1%
Inc suite of financial and
practice management
software applications,
integrated time and
billing systems, general
ledger, accounts payable
and practice management
solutions such as
marketing and contact
management, records
management
7/16/99 Sterling Software Inc Information Advantage Inc Develops client/server $163.00 18.2% 56.4%
decision support
applications (70% of
revenue) that enable
multidimensional analysis
of data warehouses and
provides custom
programming services (15%
of revenue) and training
services (15% of
revenue).
3/16/98 PLATINUM technology, Logic Works, Inc. Provides windows-based $213.14 10.9% 54.2%
Inc. database design and re-
engineering software for
client/server and RDBMs
application development
5/17/99 CFI Proservice, Inc. Ultradata Corp Provides information $ 63.00 25.0% 53.8%
management software and
solutions for financial
institutions
4/16/98 Phoenix Technologies Ltd. Award Software Provides system enabling $134.59 11.2% 53.7%
and management software
for personal computers
and embedded systems
12/9/99 Titan Corp Advanced Communication Provides communications $175.00 37.3% 50.9%
Systems Inc and information
technology services and
solutions to u.s.
government agencies and
commercial and
international customers
3/23/98 Cognizant Corp Walsh International, Inc. Supplier of market $170.23 6.6% 50.2%
research, business
analysis, forecasting and
sales management services
to the global
pharmaceutical industry
2/22/99 Science Applications Oacis Healthcare Holdings Develops, markets, $ 51.02 36.9% 42.4%
International Corp. Corp. licenses, installs and
supports flexible,
enterprise wide, open
architecture clinical
information systems,
enabling physicians and
other clinicians to view
and act on information in
real time at the point of
care
7/21/98 Lernout & Hasupie Speech Globalink, Inc. Designs, develops, $ 71.00 21.1% 40.0%
Products NV markets and supports
software products for
language translation;
also provides
professional language
services for its
customers
</TABLE>
BROADVIEW 13
<PAGE> 32
CONFIDENTIAL
PUBLIC SELLER PREMIUM ANALYSIS
Software Transactions With Equity Consideration Between $50 Million and $250
Million at Announcement (1)
Since January 1, 1998
<TABLE>
<CAPTION>
PREMIUM
EQUITY PREMIUM PAID 20
CONSIDERATION PAID ONE TRADING
ANNOUNCE AT DAY BEFORE DAYS BEFORE
DATE BUYER SELLER DESCRIPTION ANNOUNCEMENT ANNOUNCEMENT ANNOUNCEMENT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6/25/99 Answer Think Consulting THINK New Ideas, Inc. Provides integrated $231.16 17.7% 38.8%
Group, Inc. consulting and technology
solutions focused on the
web-driven electronic
commerce market
7/29/99 Oak Technology Inc Xionics Document Designs, develops and $70.17 20.5% 36.5%
Technologies Inc markets embedded software
and technology for
printers, copiers, and
peripherals, oem
customers include
multifunction
hewlett-packard, ibm,
ricoh, xerox, seiko epson
and sharp
1/5/98 PLATINUM Technology, Learmonth & Burchett Develops the systems $74.05 36.1% 36.1%
Inc. Management Systems, Inc. engineer toolset and the
process engineer toolset
families of case
products; products are
based on windows and
utilize multi-user sql
databases as a shared
repository
3/5/99 Hummingbird PC DOCS Group Develops, markets and, $155.00 14.9% 31.6%
Communications Ltd. International Inc. supports object-oriented
client/server and
internet document
management systems,
knowledge management
systems and financial and
case management systems
for professionals
6/29/98 Information Advantage IQ Software Corp. Designs, develops and $65.00 9.2% 31.1%
Software, Inc. markets client/server
tools for data access and
report writing
5/9/99 Philips Electronics NV2 Voice Control Systems Speech software platform $59.00 25.5% 30.6%
Inc. provider, offering
vocabularies in over 50
languages with more than
2.5 million speech
recognizers, including
500,000 in telecom,
installed in 30 countries
1/27/98 Sage Group plc State Of The Art, Inc. Provider of accounting $245.83 33.3% 30.4%
s/w for small to middle
market companies
4/5/99 Lucent Technologies, Mosaix Inc. Provider of call center $145.00 24.3% 28.1%
Inc. software, predictive
dialers and workflow
applications that enable
companies to acquire,
retain and develop
customer relationships
10/15/98 Symantec Corp. Quarterdeck Corp. Develops and markets $47.29 18.9% 28.0%
desktop systems software
and productivity
applications that
increase internet,
intranet, and standalone
systems functionality and
performance; product line
addresses storage
management, system
conflict resolution,
virus protection, system
updating, and enhanced
access to networked
information and
communications resources
9/6/99 Amdocs Ltd International Provides comprehensive $181.50 27.7% 27.7%
Telecommunication Data transactional billing and
Systems Inc management information
solutions to providers of
wireless, long distance
and satellite
telecommunications
services
5/7/98 Peregrine Systems, Inc. Innovative Technologies Developer of span(*)fm $76.63 10.9% 25.8%
Systems, Inc. facility & technology
management software and
remote data collection
systems
</TABLE>
BROADVIEW 14
<PAGE> 33
CONFIDENTIAL
PUBLIC SELLER PREMIUM ANALYSIS
Software Transactions With Equity Consideration Between $50 Million and $250
Million at Announcement (1)
Since January 1, 1998
<TABLE>
<CAPTION>
PREMIUM
EQUITY PREMIUM PAID 20
CONSIDERATION PAID ONE TRADING
ANNOUNCE AT DAY BEFORE DAYS BEFORE
DATE BUYER SELLER DESCRIPTION ANNOUNCEMENT ANNOUNCEMENT ANNOUNCEMENT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1/28/00 Leapnet Inc SPR Inc Provides information $92.00 27.8% 22.4%
technology services to
clients in a variety of
industry groups including
retail, financial
services, healthcare and
insurance.
2/14/00 AT&T Corp GRC International Inc Provider of professional $186.00 12.1% 18.8%
and technical services to
military, civil and
commercial clients
10/13/98 Platinum Software Corp. DataWork Corp. Markets, designs, $92.84 20.0% 18.6%
develops and supports
open systems,
client/server-based
enterprise resource
planning software for
mid-sized manufacturing
companies.
2/17/99 MOB (Cornerstone Equity Equitrac Corporation Develops, manufactures, $74.34 4.3% 12.8%
Investors LLC) markets and supports a
fully integrated computer
hardware and software
communications network
designed to automatically
track, record and report
usage of various office
equipment
4/15/98 Siebe plc Simulation Sciences, Inc. Provider of application $141.43 24.0% 11.9%
s/w and related services
to the petroleum,
petrochemical and
industrial-chemical-
process industries
6/30/99 Livewire Media LLC Enterprise Software Inc Develops software $81.00 15.6% 6.5%
programs for television
stations to, among other
things, track how much to
charge for their
advertising spots
depending on when they
air.
6/15/98 NetManage, Inc. FTP Software, Inc. Develops, markets, and $77.40 10.3% -28.7%
supports network software
products that provide
TCP/LIP network transport
functionality. the
company also provides
custom product
development, consulting,
and integration services
-------------------------------------------------------------------
Mean 37.2% 72.4%
High 186.6% 326.6%
-------------------------------------------------------------------
MEDIAN 24.3% 53.8%
-------------------------------------------------------------------
Low -6.3% -28.7%
===================================================================
</TABLE>
Notes
(1) Purchase price per share in stock transactions calculated using the buyer
share price at closing share price before announcement.
BROADVIEW 15
<PAGE> 34
CONFIDENTIAL
VIASOFT TRADING HISTORY
Historical Weekly Share Price and Volume Performance from 04/23/99 to 04/20/00
[Graph]
BROADVIEW 16
<PAGE> 35
CONFIDENTIAL
COMPANY-WEIGHTED INDEX OF PUBLIC
COMPANY COMPARABLES VS. VIASOFT AND THE
S&P 500
Historical Weekly Share Price Performance from 4/23/99 to 04/20/00
[Graph]
BROADVIEW 17
<PAGE> 36
CONFIDENTIAL
PRESENT VALUE OF PROJECTED VIASOFT SHARE
PRICE
<TABLE>
<S> <C>
- ----------------------------------------------
52 Week High $8.78
Current Share Price as of 4/26/00 $5.50
52 Week Low $3.78
- ----------------------------------------------
</TABLE>
<TABLE>
<S> <C>
- ------------------------------------------------------------------
Diluted EPS For TTM Period Ending 3/31/00 $0.09
Projected Diluted EPS for Fiscal Year Ending 6/30/01 $0.38
Current Viasoft P/E NM
Median P/E of Public Company Comparables 33.95
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CALCULATION OF IMPLIED SHARE PRICE BASED ON MEDIAN P/E OF COMPARABLES
- ---------------------------------------------------------------------------
MEDIAN P/E OF VIASOFT PROJECTED IMPLIED FUTURE SHARE
COMPARABLES EPS (6/30/01) PRICE
----------- ------------- -----
<S> <C> <C>
33.95 x $0.38 $12.90
</TABLE>
<TABLE>
<CAPTION>
PRESENT VALUE OF SHARE PRICE BASED ON EARNINGS
FOR TWELVE MONTHS ENDED 6/30/01 AT VARIOUS DISCOUNT RATES (1)
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11.00% 14.46% (2) 14.52% (3) 16.00% 21.00% 26.00%
------ ---------- ---------- ------ ------ ------
$11.31 $10.88 $10.87 $10.70 $10.14 $ 9.64
</TABLE>
SENSITIVITY ANALYSIS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRESENT VALUE OF SHARE PRICE BASED ON EARNINGS
FOR TWELVE MONTHS ENDED 6/30/01 AT VARIOUS DISCOUNT RATES (1)
IMPLIED FUTURE SHARE -------------------------------------------------------------------------------
P/E (4) PRICE 11.00% 14.46% (2) 14.52% (3) 16.00% 21.00% 26.00%
------- ----- ------ ---------- ---------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
20.50 $7.79 $6.83 $6.57 $6.57 $6.46 $6.13 $5.82
23.00 $8.74 $7.66 $7.37 $7.37 $7.25 $6.87 $6.53
25.50 $9.69 $8.50 $8.17 $8.17 $8.04 $7.62 $7.24
28.00 $10.64 $9.33 $8.97 $8.97 $8.82 $8.37 $7.95
30.50 $11.59 $10.16 $9.77 $9.77 $9.61 $9.11 $8.66
33.00 $12.54 $10.99 $10.58 $10.57 $10.40 $9.86 $9.37
-----------------------------------------------------------------------------------------------------------------------
33.95 $12.90 $11.31 $10.88 $10.87 $10.70 $10.14 $9.64
-----------------------------------------------------------------------------------------------------------------------
35.50 $13.49 $11.83 $11.38 $11.37 $11.19 $10.61 $10.08
38.00 $14.44 $12.66 $12.18 $12.17 $11.98 $11.35 $10.79
38.00 $14.44 $12.66 $12.18 $12.17 $11.98 $11.35 $10.79
40.50 $15.39 $13.49 $12.98 $12.97 $12.76 $12.10 $11.50
40.50 $15.39 $13.49 $12.98 $12.97 $12.76 $12.10 $11.50
43.00 $16.34 $14.33 $13.78 $13.77 $13.55 $12.85 $12.21
</TABLE>
Notes:
(1) Assumes that results are reported thirty days after end of period.
(2) Based on CAPM and median beta (adjusted for capital structure) of the
public company comparables.
(3) Based on CAPM and Viasoft's historical beta.
(4) Range based on analysis of public company comparables.
BROADVIEW 18
<PAGE> 37
CONFIDENTIAL
DISCOUNT RATE CALCULATION
($Thousands Except Per Share Data)
<TABLE>
<CAPTION>
EQUITY MARKET CORPORATE UNLEVERED
PUBLIC COMPANY COMPARABLES LEVERED BETA (1) CAPITALIZATION TOTAL DEBT TAX RATE (2) BETA (3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Saga Systems Inc [AGS] 1.380 $534,244 $ 946 38.8% 1.379
Centura Software Corp [CNTR] 1.230 $180,188 $2,960 34.0% 1.217
MERANT plc [MRNT] 1.180 $366,163 $1,412 35.1% 1.177
Crystal Systems Solutions Ltd. [CRYS] 1.200 $ 94,653 $3,480 38.0% 1.173
ILOG SA [ILOG] 1.120 $584,245 $5,856 35.0% 1.113
Rogue Wave Software Inc [RWAV] 0.850 $ 57,772 $ 0 34.4% 0.850
Progress Software Corp [PRGS] 0.830 $693,336 $ 0 32.0% 0.830
Pervasive Software, Inc. [PVSW] 0.730 $109,816 $ 0 30.3% 0.730
eXcelon Corp [EXLN] 0.560 $276,308 $ 0 35.0% 0.560
- ---------------------------------------------------------------------------------------------------------------------------------
Median of Comparables 1.120 1.113
Viasoft (1) 1.120
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CALCULATION OF VIASOFT LEVERED BETA BASED ON MEDIAN BETA OF COMPARABLES
- ----------------------------------------------------------------------------------------------------------------------------------
EQUITY MARKET CORPORATE LEVERED
VIASOFT UNLEVERED BETA(3) CAPITALIZATION TOTAL DEBT TAX RATE BETA
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Viasoft 1.113 $ 99,506 $ 0 38.0% 1.113
</TABLE>
<TABLE>
<CAPTION>
Calculation of Consilium Cost of Equity
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Market Risk Premium (4): 7.5%
Risk Free Rate (5): 6.1%
CAPM: (Risk Free Rate + (Levered Beta (*) Market Risk Premium))
COST OF EQUITY BASED ON BETA OF COMPARABLES (6) 14.5%
COST OF EQUITY BASED ON VIASOFT HISTORICAL BETA 14.5%
</TABLE>
Notes
(1) Levered betas derived from Bloomberg.
(2) All corporate tax rates aggregate federal, state and foreign tax rates
from each company's latest 10-K filing, excludes all net operating loss
carryforwards and tax credits.
(3) Unlevered Beta = Levered Beta (*) (Equity Market Capitalization / (Debt
(*) (1- Corporate Tax Rate) + Equity Market Capitalization)).
(4) Source: Ibbotson Associates, Inc., Stocks, Bonds, Bills, and Inflation
1997 Yearbook, Ibbotson and Associates, Chicago, 1997.
(5) 10 Year U.S. Treasury Bond Rate.
(6) Calculated using the levered beta derived from the median unlevered beta
of the public company comparables and Viasoft's capital structure.
BROADVIEW 19
<PAGE> 38
CONFIDENTIAL
COMBINATION ANALYSIS: BUYER ACQUIRES SELLER
Shares Outstanding Worksheet(1)
(Thousands, except per share data)
SUMMARY
<TABLE>
<S> <C>
Purchase Price Per Share: $ 8.40
Common Shares Outstanding as of 3/31/00: 18,092
Common Equivalents: 345
Total Shares to be Acquired: 18,437
</TABLE>
OPTION TABLE
<TABLE>
<CAPTION>
CASH PAID
NUMBER OF BY OPTION SHARES SHARES
STRIKE PRICE OPTIONS HOLDERS ISSUED REPURCHASED NET DILUTION
------------ ------- ------- ------ ----------- ------------
<S> <C> <C> <C> <C> <C>
$ 3.3750 40.000 $ 135 40.00 16.07 23.9
3.7500 3.334 $ 13 3.33 1.49 1.8
3.7969 125.700 $ 477 125.70 56.82 68.9
4.0000 305.599 $1,222 305.60 145.52 160.1
6.3750 17.249 $ 110 17.25 13.09 4.2
6.7500 420.013 $2,835 420.01 337.51 82.5
7.1875 1.000 $ 7 1.00 0.86 0.1
7.7500 40.000 $ 310 40.00 36.90 3.1
8.8750 151.876 $ 0 -- -- --
11.0625 23.673 $ 0 -- -- --
13.0625 0.500 $ 0 -- -- --
16.0000 0.500 $ 0 -- -- --
30.6875 95.251 $ 0 -- -- --
33.5000 40.000 $ 0 -- -- --
34.7500 105.000 $ 0 -- -- --
37.6250 1.500 $ 0 -- -- --
45.2500 40.000 $ 0 -- -- --
------------------------------------------------------------------------------------------
Net Dilution From All Options 344.6
------------------------------------------------------------------------------------------
</TABLE>
(1) Options table provided by Viasoft Management.
BROADVIEW 20
<PAGE> 1
EXHIBIT (c)(3)
<PAGE> 2
CONFIDENTIAL
JUPITER ANALYSIS
NEW YORK
SILICON VALLEY
BOSTON
LONDON
TOKYO
April 3, 2000
BROADVIEW INT'L LLC
MEMBER NASD
MEMBER SIPC
BROADVIEW
<PAGE> 3
CONFIDENTIAL
JUPITER PRODUCT OFFERING
- Jupiter provides e-business and web application hosting
solutions designed to deliver business-to-business
applications that leverage legacy corporate systems and
application development resources
- Jupiter for Java provides a Java-based interface for
mainframe and mini-computer software applications
- Jupiter Connects is a derivative for Java that uses open
Java API to integrate mainframe and AS/400 applications
with other applications.
- Jupiter for Visual Basic and Jupiter for Windows generate
Visual Basic, ActiveX, Windows-based interfaces for
mainframe and minicomputer applications
- Jupiter supports it customers implementation of these
e-business solutions through its own consulting and
integration services division
BROADVIEW
2
<PAGE> 4
CONFIDENTIAL
PUBLIC COMPANY COMPARABLES
($Thousands Except Per Share Data)
OPERATING AND VALUATION STATISTICS
<TABLE>
<CAPTION>
PROJECTED SHARE
TTM REVENUE REVENUE 12/31/00 CASH & PRICE AS EQUITY MARKET
COMPANY (1) (2) GROWTH REVENUE EQUIVALENTS OF 3/30/00 CAPITALIZATION
- ------------ ----------- ------- --------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Ilog SA [ILOG] 64,507 2.3% 76,800 14,790 64.02 914,079
Centura Software Corp [CNTR] 51,030 (4.6%) NA 20,614 10.31 397,926
eXcelon [EXLN] 60,810 (2.5%) 59,903 19,174 11.25 327,692
Saga Systems [AGS] 213,283 (14.3%) 212,317 48,201 35.75 1,022,762
Progress Software [PRGS] 291,133 15.1% 317,831 166,147 23.44 953,109
Crystal Systems Solutions [CRYS] 45,907 7.0% 47,691 31,745 13.69 138,230
Merant PLC [MRNT] 364,403 NA 440,058 102,909 27.25 779,350
Rogue Wave [RWAV] 53,535 17.0% 54,242 30,698 7.63 79,912
Viasoft [VIAS] 83,415 (27.1%) 79,388 75,420 6.44 125,249
</TABLE>
<TABLE>
<CAPTION>
PROJECTED
TOTAL MARKET TTM TMC/R 12/31/00
COMPANY (1) CAPITALIZATION (3) (2) (3) TMC/R (3)
- ------------ ------------------ ---------- ----------
<S> <C> <C> <C>
Ilog SA [ILOG] 905,399 14.04 11.79
Centura Software Corp [CNTR] 381,044 7.47 NA
eXcelon [EXLN] 308,535 5.07 5.15
Saga Systems [AGS] 975,890 4.58 4.60
Progress Software [PRGS] 786,962 2.70 2.48
Crystal Systems Solutions [CRYS] 109,965 2.40 2.31
Merant PLC [MRNT] 677,853 1.86 1.54
Rogue Wave [RWAV] 49,214 0.92 0.91
Viasoft [VIAS] 49,829 0.60 0.63
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mean 136,447 (0.9%) 161,029 56,633 22.20 526,479 471,632 4.40 3.67
High 364,403 17.0% 440,058 166,147 64.02 1,022,762 975,890 14.04 11.79
Median 64,507 (0.1%) 78,094 31,745 13.69 397,926 381,044 2.70 2.39
Low 45,907 (27.1%) 47,691 14,790 6.44 79,912 49,214 0.60 0.63
JACADA [JCDA] 14,599 53.9% 23,257 55,660 14.63 257,559 202,279 13.86 8.70
</TABLE>
Notes:
(1) Valuation information calculated using the closing price on 3/30/00.
Projected financials calculated from selected analyst reports.
(2) TTM refers to Trailing Twelve Months ending 12/31/99 except for [MRNT] and
[PRGS] which refer to 1/31/00 and 2/29/00 respectively.
(3) Total Market Capitalization (TMC) is defined as equity market
capitalization (EMC) plus total debt and preferred stock less cash and cash
equivalents.
BROADVIEW 3
<PAGE> 5
CONFIDENTIAL
Summary of Jupiter Analyst Estimates
Buyer Analysis
(Thousands, except per share data)
<TABLE>
<CAPTION>
Jupiter
<S> <C>
Share Price as of 3/31/00 $ 14.63
Equity Market Capitalization 257,559
Total Market Capitalization 202,279
</TABLE>
<TABLE>
<CAPTION>
2000 2001
Revenues Revenue Revenues Revenue 2000 EPS Earnings 2001 EPS Earnings
Date Analyst Rating Estimates Multiple Estimates Multiple Estimates Multiple Estimates Multiple
- ---- ------- ------ --------- -------- --------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
01-Mar-00 Lehman Brothers (1) Buy $22,700 8.91 $34,950 5.79 ($0.08) NM $0.01 1,462.50
06-Dec-99 SG Cowen Buy $21,504 9.41 NA NA ($0.12) NM NA NA
08-Mar-00 CIBC World Markets Buy $23,300 8.68 $37,400 5.41 ($0.07) NM $0.22 66.48
Median $22,700 8.91 $36,175 5.60 ($0.08) NM $0.12 764.49
</TABLE>
Note:
(1) Lehman Brothers' revenue estimates are from 12-14-99
(2) Equity market capitalization and multiples uses Jupiter common shares
outstanding at 12-31-99.
4
BROADVIEW
<PAGE> 6
CONFIDENTIAL
Jupiter Ownership Analysis
Siginificant and Management Ownership(1)
Summary
<TABLE>
<CAPTION>
Shares Percentage
------ ----------
<S> <C> <C>
Institutional Owners 6,364,981 36.1%
Total Management Ownership 3,841,306 21.8%
========== ====
Total Significant and Management Ownership 10,206,287 58.0%
Shares outstanding (12/31/99) 17,610,893
</TABLE>
Institutional Owners
<TABLE>
<CAPTION>
Numbers of
Shares
Name of Owner Owned Percentage
------------- ----- ----------
<S> <C> <C>
Goldman Sachs Group 1,781,513 10.1%
STAR Ventures 1,685,520 9.6%
Hambrecht & Quist 1,112,655 6.3%
Gemini Israel Fund 985,013 5.6%
HarbourVest Partners LLC 800,280 4.5%
========= ====
Total 6,364,981 36.1%
</TABLE>
Note:
(1) Ownership and Shares outstanding data is as of 10/20/99.
5
BROADVIEW
<PAGE> 7
CONFIDENTIAL
Volcano and Jupiter Share Price
Volcano and Jupiter Daily Prices
From 10/18/99 To 3/31/00
[GRAPH]
BROADVIEW
6
<PAGE> 8
CONFIDENTIAL
Volcano and Jupiter Exchange Ratio
Analysis
From 10/18/99 to 3/30/00
[GRAPH]
BROADVIEW 7
<PAGE> 9
CONFIDENTIAL
Jupiter Weekly Price and Volume
From 10/18/99 To 3/30/00
[Graph]
BROADVIEW 8
