AremisSoft Announces Definitive Agreement to Acquire Fourth Shift.

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 26, 2001

Strategic Acquisition Expands Worldwide Manufacturing Software 

Market Presence

AremisSoft Corporation (Nasdaq:AREM) a leading international supplier of enterprise-wide software and Internet-enabled solutions for the manufacturing, hospitality, healthcare and construction industries, today announced a definitive agreement to acquire Fourth Shift Corporation (Nasdaq:FSFT) a worldwide supplier of enterprise resource planning (ERP) and e-business software. This acquisition represents another measured step in AremisSoft's plan to consolidate key sectors of the enterprise application software market and position the Company for additional growth from next generation e-business systems.

With this acquisition, AremisSoft expands its enterprise-wide web-enabled ERP offerings and intends to more aggressively participate in the large Tier 3 market for integrated ERP solutions. In addition, the Company will deliver a proven comprehensive web-enabled e-business solution to market more quickly. The acquisition brings to AremisSoft approximately 1600 active customers in North America, Europe, the Mid-East, and Asia. Fourth Shift has approximately 460 employees and a complete worldwide business infrastructure, including a sales organization which numbers over 70 people. The acquisition expands AremisSoft's customer base, market coverage, and sales presence in the US and other key markets, including China. AremisSoft plans to combine its UK based manufacturing software operations with Fourth Shift and expand its resource commitment to supporting both ERP systems and new e-business applications.

Roys Poyiadjis, Co-CEO and President of the US Group of AremisSoft, stated, "The acquisition of Fourth Shift represents a defining step forward for AremisSoft and its continuing strategy to leverage its global talent pool of technology resources. Fourth Shift will enable us to create a meaningful business platform to deliver value-added products and services to the manufacturing marketplace. We believe we can add substantial-business value to our customers' investments in the combined AremisSoft enterprise and e-business applications by virtue of our large India based development facilities and financial strength. Fourth Shift and AremisSoft Manufacturing have complimentary market focuses and both product lines have a well placed role in our expanded product offering."

Under the terms of the agreement, AremisSoft will acquire all of the outstanding common stock of Fourth Shift for $3.70 per share in cash for a consideration of approximately $40.5 million. The deal has been unanimously approved by the Board of Directors of both companies. Closing of the transaction is subject to approval by Fourth Shift shareholders at a meeting tentatively scheduled for May 2001 and other normal conditions.

AremisSoft projects the acquisition will add in over $30.0 million to revenue and $0.04 to pro forma earnings per share in 2001. For 2002, the Company projects the acquisition will add in over $70.0 million in revenue and pro forma earnings per share of $0.10. Pro forma net income and earnings per share for 2001 and 2002 exclude amortization of goodwill and purchased intangible assets, and non recurring operating expenses related to recent acquisitions.

Roys Poyiadjis continued, "The market for ERP software has experienced turbulent times over the past several years which has created difficulty for many manufacturing software vendors as well as confusion for their customers. We believe that Fourth Shift has done an excellent job of extending its standard products with an advanced web interface and well thought-out e-business solutions, all on an industry standard Microsoft NT/SQL Server platform. Alternatively, AremisSoft has developed an extensible product line which supports more customizable configurations supporting UNIX/NT operating systems and the Oracle/Informix databases. Offering both product lines gives us greater market coverage and gives customers greater options.

"AremisSoft is committed to delivering fully integrated e-business solutions across both product lines. We have already developed preliminary plans to provide a common e-business platform, including the multifaceted My Fourth Shift Workplace portal and our recently acquired Customer Relationship Management product. Our low cost, state-of-the-art Indian development capability allows us to meet the substantial ongoing development requirements needed to remain competitive with our core ERP systems while moving forward in e-business."

Dr. Lycourgos Kyprianou, Chairman and Founder of AremisSoft, commented, "The acquisition of Fourth Shift will benefit customers and employees. AremisSoft has consistently demonstrated the capability to acquire application software companies and provide value to customers by increasing the software development resources that can be focused on moving a product forward through our India based software development facilities. We have a proven development model that does not disadvantage any customer base we acquire. Randy Tofteland, currently the Chief Operating Officer of Fourth Shift, has enthusiastically accepted the challenge to head the new AremisSoft Manufacturing organization. Employees at Fourth Shift should look forward to the technological and financial strength of AremisSoft which should help our combined operation gain market share and prosper. "

"AremisSoft's position as a strong enterprise application systems supplier, coupled with the Fourth Shift acquisition, will give us the opportunity to acquire additional ERP software companies and take us closer to our goal of consolidating the Tier 3 market of the ERP software industry," stated Paul Bloom, Executive Vice President of Corporate Development, AremisSoft. "We feel that Fourth Shift was the right first move with a purchase at .7 times sales. With the worldwide base of operations established by combining Fourth Shift with our organization, we are in an excellent position to accelerate our consolidation activity."

About Fourth Shift

Fourth Shift is a Minneapolis-based global application software company that provides Enterprise Resource Planning software, e-business solutions, consulting, and technology services. Fourth Shift software has an active base of more than 1,600 customers globally and is translated in more than a dozen languages. Licensees include some of the fastest growing manufacturers and global enterprises from the Global 2500. Recently Fourth Shift introduced version 7.10 of its ERP software which offers a complete web browser interface to all applications as well as a comprehensive e-business suite, My Fourth Shift. The Company has approximately 460 employees and reported revenue for the twelve months ended December 31, 2000 of $61.2 million.

About AremisSoft Corporation

AremisSoft develops, markets, implements and supports enterprise-wide applications software targeted at mid-sized organizations in the manufacturing, healthcare, hospitality and construction industries. The Company's software products help streamline and enhance an organization's ability to manage and execute mission-critical functions such as accounting, purchasing, manufacturing, customer service and sales and marketing. AremisSoft reported total revenue of $123.6 million for the twelve months ended December 31, 2000 and pro forma net income of $29.2 million for the same period. AremisSoft has approximately 835 employees, with sales in over 20 countries and a customer base in excess of 7,200. The Company also operates a software development and support facility in India, with over 325 employees, which provides significant organizational efficiencies and cost advantages in software development and support.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995: All statements, other than historical facts, included in the foregoing press release regarding the Company's financial position, business strategy, and plans of management for future operations are "forward looking statements." These statements are based on management's beliefs and assumptions, and on information currently available to management. Forward looking statements include, but are not limited to, statements in which words such as "expect," "see," "anticipate," "intend," "plan," "believe," "estimate," "consider," or similar expressions are used. Forward looking statements are not guarantees of future performance. They involve risks, uncertainties, and assumptions, including risks discussed under "Risk Factors" in the Company's annual report on Form 10-K, SEC File No. 0-25713, all of which are incorporated herein by reference. The Company's actual results and stockholder values may differ materially from those anticipated or expressed in these forward looking statements. Many of the factors that will determine these results and values are beyond the Company's ability to control or predict. Readers of this press release are cautioned not to put undue reliance on any forward looking statement. The Company undertakes no obligation to publicly update these forward looking statements, whether as a result of new information, future events or otherwise.

NOTICE OF CONFERENCE CALL:

AremisSoft will be hosting a conference today, Monday, February 26 at 4:45 p.m. EST . To participate in the conference call, local and international callers can dial 212-896-6087. Callers from the United States and Canada can dial 888-214-7561. A replay will be available approximately one hour after the call until midnight on March 5. The replay number is 858-812-6440, passcode: 18115675. The call will also be available via the Internet by accessing the AremisSoft web site: www.aremissoft.com. Simply go to the Investor Relations' Press Release section to link to the audio. The call will also be available on the Vcall web site: www.vcall.com.