Exhibit (m)
Customer Letter - Final Template. To be distributed by country organizations
to their customer base.
Dear xxx
I am writing to ensure that you, as a valued Baan customer are fully up to date
with the most recent developments around Baan Company. On 17th July 2000, Baan
Company issued its audited annual accounts for 1999.
In summary, the annual accounts confirm that Baan remains in a very challenging
business environment and it remains management's strong view that the best path
forward for the Company is the proposed acquisition by Invensys plc.
The 1999 U.S. Annual Report on Form 20-F was filed with the U.S. Securities and
Exchange Commission and our 1999 Dutch Statutory Accounts have been made
available for shareholder inspection (the latter, as per Dutch law, remains
subject to shareholder approval). Both documents are available on the Company
Web site at www.baan.com, and the 20-F is also available on the SEC's on-line
EDGAR service.
1999 Accounts
Net revenues for the year were $619 million, compared to net revenues of $736
million for 1998. License revenue for 1999 was $193 million, as compared with
$336 million for 1998. Maintenance and service revenue was $426 million, as
compared to $399 million for 1998.
These revenue numbers are slightly less than the numbers we reported in our
unaudited February 3, 2000 year-end earnings announcement. In a very difficult
trading environment, it will not come as a surprise to any of our customers that
we have had to take certain adjustments to our accounts since the year-end. This
is primarily as a direct result of the questions around our viability during the
last six months. For some perspective, the total revenue adjustments were $16
million, which represents 2.5% of the $635M revenue total we announced February
3.
Nonetheless, given the slight shareholder equity we posted at year end of
positive $9M, even the limited net adjustments we took were enough to move us
into negative shareholder equity of ($7.8M). Moving into negative equity at this
point does not change things very much. We had already announced that we will
close Q2 in a negative equity position, and the AEX - which requires its listed
companies to maintain positive shareholder equity -- has said we will be placed
under "special listing conditions" unless the Invensys offer closes in the near
future. That remains true.
The Invensys Offer
Baan Company's 1999 accounts outline fundamental reasons why we think the
Invensys offer is the best way to secure our future.
At its core, the issue for us right now is customer confidence. Our world-class
solutions continue to open up strong market opportunities for us but the
viability issue, understandably, remains a realistic constraint on our success.
Baan needs a strong strategic partner to remove the viability issue, help to
restore customer confidence, and return us to a more normal business cycle. The
Management and Supervisory Boards of Baan Company continue to unanimously
support the Invensys offer.
Invensys plc has extended the offer to acquire the outstanding share capital of
Baan Company, through July 25, 2000. As of July 14, 2000 (the original offer
date), Invensys owned or had received tendered shares equaling approximately 60%
of the Company's shares. However, the Offer Agreement between us requires that
95% of our shares must be tendered, or Invensys reserves the right to terminate
the offer. We hope that
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the information we will be making available this week will help further set
forth why we believe Invensys is the right solution for Baan and its customers.
Invensys is planning to form Invensys Software and Systems Division (ISS), of
which Baan will be become an integral part. ISS will be a global leader in
manufacturing solutions providing Leanware(TM) software and services and the pro
forma combined group will have annual revenue of approximately $2 billion, based
on the current position. ISS fundamentally understands the 'lean' manufacturing
business model that our customers are adopting today and also recognizes the
increased pressures facing manufacturing companies as a result of the e-business
phenomenon.
Invensys believes that the combination of the Baan and Invensys software and
systems business will create:
o A tightly managed, cost efficient leader in the provision of fully
integrated industrial software solutions;
o A software and systems division with sufficient critical mass to compete
in the global market, with Baan bringing strong R&D capabilities that will
augment the Invensys product pipeline and future performance with
injection of new software, sales and consulting talent;
o A division with a complementary fit, helping expand the Invensys Sensor to
Boardroom(TM)capabilities;
o A division with products in e-business, Customer Relationship Management,
web-enabled ERP and Supply Chain Management providing ISS with significant
long-term growth potential.
Thank you for your patience and on-going support as we move through this offer
period. Hopefully we are coming to what will be a successful conclusion for our
customers, our shareholders, and our employees.
Yours faithfully
Baan Company N.V.
/s/ Pierre J. Everaert
Pierre Everaert
Interim CEO
Baan Company
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