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Software AG to Acquire the Application Modernization Business of Jacada for $26M Cash

Posted on: Thursday, 20 December 2007, 09:00 CST

Software AG, a global leader in business infrastructure software, today announced the acquisition of the application modernization business of Jacada (Nasdaq:JCDA) for $26M in a cash transaction. The asset deal expands Software AG's application modernization portfolio with additional products for modernizing the user interface of mainframe and mid-range-based applications. In addition, eight of Jacada's R&D and support staff will join Software AG ensuring continuous product development and customer support. Software AG will gain over 200 enterprise customers, mostly in the United States, as a result of the acquisition. These customers will benefit from direct access to Software AG's comprehensive business infrastructure software portfolio.

Jacada's application modernization products currently generate around $12M in annual revenue with profit margins above Software AG's group average. The asset deal, effective as of January 1, 2008, will be earnings accretive in 2008. This is Software AG's third acquisition of 2007 following the acquisition of webMethods, Inc. in June 2007 for $546M and 80% of SPL Israel in March 2007 for $62M. Software AG is committed to providing market leadership in the business infrastructure software sector through technology innovation and acquisitions.

"With our unique heritage as well as our strength in SOA, Software AG is well-positioned to extend our leadership in the application modernization market," said Karl-Heinz Streibich, CEO, Software AG. "For current Jacada customers, the acquisition is excellent news. Existing products will benefit from an expanded research & development organization with far greater financial resources. These customers will also enjoy access to a host of complementary products. This is also good news for Software AG as the acquired technology will further strengthen our position within an important market."

Application modernization extends the value of custom applications by making their existing functionality and data available via the Web, within a service-oriented architecture (SOA), or as part of an end-to-end business process.

"We expect the deal to enhance our earnings in 2008 while supporting our goal of a 23%-24% EBIT margin," said Arnd Zinnhardt, CFO, Software AG. "This is consistent with our policy of acquisition being EBIT positive within a year or even sooner as in this case. It also underscores our willingness to acquire established businesses that will benefit appreciably from the infrastructure, global reach and efficient management offered by Software AG."

About Software AG

Software AG's 4,000 global customers achieve measurable business results by modernizing and automating their IT systems and rapidly building new systems to meet growing business demands. The company's industry-leading product portfolio includes best-in-class solutions for managing data, enabling service oriented architecture, and improving business processes. By combining proven technology with industry expertise and best practices, our customers improve and differentiate their businesses -- faster. Software AG has more than 37 years of global IT experience and approx. 3,800 employees serving customers in 70 countries. The company is headquartered in Germany and listed on the Frankfurt Stock Exchange (TecDAX, ISIN DE 0003304002 / SOW). Software AG posted total revenues of €483 million in 2006.

Source: Business Wire

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