Bottomline Technologies Announces Two Acquisitions To Accelerate Growth.

Business/Technology Editors

PORTSMOUTH, N.H.--(BUSINESS WIRE)--Aug. 28, 2000

Company Gains International Distribution Channel and Established

Customer Base by Acquiring U.K.-Based Checkpoint Holdings, Ltd.

Web-Based Development Expertise Increased Through

Acquisition of Flashpoint, Inc.

Bottomline Technologies(R) (NASDAQ:EPAY), the leading provider of Web-enabled billing, payment and electronic banking solutions, today announced two key acquisitions, Checkpoint Holdings, Ltd. "Checkpoint" and Flashpoint, Inc. "Flashpoint." Based in Reading, England, Checkpoint is the leading eCommerce and electronic payments software provider for the UK. Flashpoint is a Web-based software development organization based in Boston, MA.

"With these two acquisitions, we expect to significantly accelerate our growth, extend the reach of our technology solutions and provide further resources for our global customers and worldwide channel partners," said Dan McGurl, president and CEO of Bottomline Technologies. "We began this fiscal year with the objectives of international expansion and increased capacity for product development, these two acquisitions are significant steps to accomplishing these goals."

"With a leading market position, outstanding reputation and industry expertise in electronic payments in the UK, Checkpoint is a perfect complement to Bottomline. By acquiring Checkpoint's technology, expertise and customer base, we open a new distribution channel that will significantly enhance our international growth opportunities," continued Mr. McGurl. "At the same time, with the acquisition of Flashpoint we significantly expand our software development resources by adding a company of highly-skilled developers with whom we have a long-standing relationship."

Checkpoint Acquisition

Checkpoint is UK's market leader for improving efficiency in corporate financial transactions. Currently, Checkpoint provides its software and services to over 3,000 existing customers, including 95 of the Financial Times list of the largest 100 UK companies. Among Checkpoint's current clients are British Telecom, American Express, Deutsche Bank and Axa Financial Services. Checkpoint has also secured channel partnerships with premier financial institutions including Hongkong and Shanghai Banking Corporation (HSBC), Barclays, Royal Bank of Scotland and Lloyds TSB Group.

Checkpoint, with its complementary skillset and customer base, will leverage Bottomline's market-leading technology for electronic billing and payments as well as electronic banking. Bottomline's offerings will be enhanced through Checkpoint's expertise in UK's Banks Automated Clearing System (BACS) network, and also enhanced to be compliant with all Association of Payment and Clearing Services (APACS) standards for payment security. Checkpoint's technology also supports Euro-denominated transactions.

"With Bottomline we have a combination that allows us to build on our reputation in the UK and position us as the leading provider of electronic payment software in Europe," said Peter Fortune, CEO of Checkpoint. "Bottomline brings the new technologies, in the form of its electronic bill presentment and payment and electronic banking products, that our customers require. We see a tremendous growth opportunity through the introduction of Bottomline's product set, allowing us to further capitalize on our reputation and strong customer relations"

"Our acquisition of Checkpoint represents the ideal opportunity for our international expansion and we are excited by the synergies between the two companies," continued Dan McGurl. "By combining our leadership positions and collective expertise in B2B transactions, we have the opportunity to advance the worldwide market for electronic invoicing and payments and electronic banking."

The transaction is valued at approximately $78 million, with $15 million being paid in cash, $20 million in the form of a promissory note, 1,350,000 newly issued shares of common stock of Bottomline and a warrant to purchase 100,000 shares of common stock of Bottomline at a price of $50 per share. The transaction will be accounted for as a purchase and Checkpoint's financial results will be reported under Bottomline's current revenue segments. Bottomline is acquiring Checkpoint from Mercury Private Equity, a European venture capitalist organization with offices in the UK and Germany.

Bottomline expects the acquisition to be dilutive for the fiscal year 2001 and accretive thereafter.

Checkpoint is located in Reading, England and more information is available at www.checkpoint.co.uk.

Flashpoint Acquisition

Flashpoint is a professional software development company that has been working as a partner with Bottomline on the development of its Web-based offerings. With a core expertise in Web-based software development and a highly skilled team of professionals, Flashpoint represents a significant enhancement to Bottomline's research and development efforts. Flashpoint has core expertise in Windows-based software development, leading browser applications and programming languages including C++, Java and XML.

"Since Bottomline has an established working relationship with Flashpoint and their team is well-versed in our products, we expect a smooth assimilation and an immediate contribution to our development efforts," said Eric Campbell, chief technology officer for Bottomline. "This acquisition will allow Bottomline to extend the leadership position we have with our Internet-based products such as NetTransact, our B2B electronic bill presentment and payment (EBPP) product."

"Working with Bottomline, we have become extensively involved in the development of NetTransact," said Eric Levine, president of Flashpoint. "We see Bottomline as the leader in an enormous emerging market. We are very excited about becoming part of the company at the beginning of this growth and see ourselves expanding the technological leadership Bottomline enjoys today."

The purchase price is approximately $12 million, consisting of $4.5 million in cash and $7.5 million in stock. In addition, all outstanding stock options of Flashpoint are being assumed by Bottomline Technologies. The transaction will be accounted for as a purchase. Flashpoint is not expected to make a material contribution to Bottomline's fiscal year 2001 revenues.

Flashpoint is based in Boston, MA and more information is available at www.flashpt.com.

Bottomline will be hosting a conference call to discuss the two acquisitions beginning at 8:00 a.m. on August 29, 2000. Please see the corresponding advisory issued this afternoon for information on the call. The call will also be broadcast live at www.bottomline.com and a replay will be available on the website following the call.

About Bottomline Technologies

Bottomline Technologies(R) (NASDAQ: EPAY) is the leading provider of Web-enabled billing, payment, and electronic banking solutions for the business-to-business market. Bottomline's three integrated e-business offerings enable corporations and financial institutions worldwide to integrate, automate, and streamline the entire financial supply chain. PayBase(R) provides a pathway from traditional paper checks to electronic payments, as well as sophisticated messaging, remittance, and anti-fraud tools. NetTransact(TM), the Company's business-to-business bill presentment and payment suite, enables enterprise billers and their trading partners to electronically present, adjudicate, and pay bills on-line. Bottomline's BankQuest(TM) is a corporate and institutional browser-based electronic banking platform that provides information reporting and transactional services for cash management, trade finance, and securities processing. Today, Bottomline's offerings are utilized by over 2,500 organizations representing every major industry sector. Founded in 1989, Bottomline maintains its headquarters in Portsmouth, NH and has satellite offices located in most major cities. For more information, dial [phone] or visit Bottomline on the web at http://www.bottomline.com.

This announcement contains forward-looking statements that involve risks and uncertainties, including statements regarding expected benefits of use of the Company's products and future growth or results. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. More information about potential factors that could affect the company's business and financial results is included in the Company's Annual Report on Form 10-K including (without limitation) under the captions, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Factors That May Affect Future Results", which is on file with the Securities and Exchange Commission (http://www.sec.gov). The accompanying condensed statements of operations and balance sheets are an integral part of this announcement.