Business Objects Announces Agreement to Acquire Crystal Decisions; Creates the Leading Provider of Enterprise Business Intelligence Solutions.Business Editors SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. and PALO ALTO Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. , Calif. and PARIS--(BUSINESS WIRE)--July 18, 2003 Business Objects, (Nasdaq: BOBJ BOBJ Business Objects SA ; Euronext Paris Euronext Paris is France's securities market, formerly known as the Paris Bourse, which merged with the Amsterdam and Brussels exchanges in September 2000 to form Euronext NV, which is the second largest exchange in Europe behind the London Stock Exchange. ISIN Isin (ĭs`ĭn), capital of an ancient Semitic kingdom of N Babylonia. The city became important after the third dynasty of Ur fell to the Elamites and the Amorites (c.2025 B.C.). The phase from c.2025–c.1763 B.C. code FR0004026250 - BOB) and Crystal Decisions, Inc. today announced a definitive agreement under which Business Objects will acquire privately-held Crystal Decisions, the fastest-growing vendor in the business intelligence (BI) market, and the leading provider of enterprise reporting With the dramatic expansion of information technology, and the desire for increased competitiveness in corporations, there has been an increase in the use of computing power to produce unified reports which join different views of the enterprise in one place. software. Under the terms of the agreement, Business Objects will issue approximately 26.5 million shares of common stock in respect of outstanding Crystal Decisions common shares and stock options, which will represent approximately 29 percent of the combined company's shares. In addition, Crystal Decisions stockholders will receive an aggregate of $300 million in cash. Based on the closing price of Business Objects' stock on July 17, 2003 the transaction is valued at an aggregate purchase price of approximately $820 million. This transaction joins two of the strongest-performing companies in enterprise software, with highly complementary products, distribution channels, and talent pools. The transaction is expected to be accretive to Business Objects' 2004 earnings even prior to considering the impact of expected revenue and cost synergies Cost Synergy In the context of mergers, cost synergy is the savings in operating costs expected after two companies, who compliment each other's strengths, join. Notes: The savings in operating costs usually come in the form of laying off employees. , but before purchase accounting adjustments. The companies expect to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. significant growth opportunities resulting from complementary products, channels, and geographic presence. The companies also believe there are significant opportunities for operating cost synergies, which are expected to result in pre-tax savings of approximately $25 million for calendar year 2004. "With this combination, we will seize the opportunity to take a leadership position in the BI market," said Bernard Liautaud Bernard Liautaud is chairman and chief strategy officer of Business Objects. Liautaud cofounded Business Objects in 1990 and was chief executive officer until September 2005. , chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Business Objects. "The two companies are not only successful leaders in their space but have extremely complementary businesses, across many dimensions: product capabilities, distribution channels, international coverage, and skillset. Together, we will become the clear choice for organizations looking to standardize stan·dard·ize v. 1. To cause to conform to a standard. 2. To evaluate by comparing with a standard. on a single BI provider." Crystal Decisions, the Fastest Growing Company in Business Intelligence Crystal Decisions leads the enterprise reporting segment of the BI market. The company is the fastest-growing vendor in the BI market, having achieved 30% annual growth in 2002. For the twelve months ended March 2003, Crystal Decisions' revenue was $270 million, with an operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 14%. Crystal Reports, the company's flagship product A primary product of a company, which is typically why the company was founded and/or what made it well known. For example, MS-DOS, Windows and the Microsoft Office suite have been flagship products of Microsoft. CorelDRAW is a flagship product of Corel Corporation. , has shipped over 14 million licenses and is the most widely used report authoring tool in the market. Crystal Decisions has one of the strongest partner programs in the BI industry with over 350 OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and relationships, including Hyperion, Microsoft, Peoplesoft, and SAP. "We are delighted at the prospect of joining the Business Objects team, and feel this is a perfect fit from a product, market, and cultural perspective," said Jon Judge, president and chief executive officer, Crystal Decisions, Inc. "In the business intelligence market, size and scale will be key ingredients to long-term success. This combination will accelerate our own plans to better serve our customers by offering a broader product line and becoming a part of the new number one vendor in business intelligence." Strategic Rationale The combined company will give Business Objects: -- Business intelligence market leadership -- The strongest, most complete product line -- A powerful range of distribution channels -- Significant new growth opportunities Business Intelligence Leadership The combined company will have: -- More than 3800 total employees -- More than 500 quota-carrying salespeople -- More than 1000 customer-facing staff in technical support, education, and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. -- More than 700 alliance partners -- More than 16 million licenses The Strongest and Most Complete Product Line By combining the two companies' product lines, Business Objects will be able to meet the needs of all BI users and provide a strong product offering in all BI market categories. The combined product offering will be the strongest and most comprehensive available in the industry today. Business Objects has long served the "power users" in organizations through its strong ad hoc query A non-standard inquiry. An ad hoc query is created to obtain information as the need arises. Contrast with a query that is predefined and routinely performed. See query and ad hoc. , reporting, and analysis capabilities. Business Objects has recently targeted executives with its new dashboard, scorecard, and enterprise performance management (EPM EPM equine protozoal myeloencephalitis. ) capabilities, launched earlier this year. Crystal Decisions is the solution of choice for a very large population of report consumers throughout organizations. Together, the two companies will offer a broad product line that meets the needs of all types of enterprises and all types of users. Powerful Range of Distribution Channels The combined company will benefit from unparalleled strength in distribution and will be able to leverage: -- Crystal Decisions' more than 350 OEM partners, including Hyperion, Microsoft, PeopleSoft, and SAP -- Crystal Decisions' reseller, distributor, and inside sales channels -- Both companies' enterprise sales organizations -- Business Objects' relationships with major systems integrators Significant Growth Opportunities Business Objects sees several immediate opportunities for growth: -- Product cross-sell. Cross-selling products between the respective companies' customer bases -- Geographic penetration. Leveraging respective geographic strengths, in particular, Business Objects' well established presence in Europe, where enterprise reporting is under-penetrated "We are very excited about becoming the largest shareholder of the combined company," said Dave Roux Roux , Pierre Paul Émile 1853-1933. French bacteriologist. His work with the diphtheria bacillus led to the development of antitoxins to neutralize pathogenic toxins. , a Crystal Decisions board member and co-founder of Silver Lake Partners Silver Lake Partners is a notable American private equity firm founded in 1999 and headquartered on Sand Hill Road in Menlo Park, California. It focuses its activities in the information technology industry. . "This combination is a powerful one for customers, partners, and employees. I look forward to serving as a board member of Business Objects and working with Bernard Liautaud and the other members of the management team." Mr. Roux is expected to join the Business Objects board of directors. The transaction is expected to close in the fourth calendar quarter of 2003, and is expected to be tax free to shareholders of both companies with respect to the stock consideration the shareholders receive. The transaction is subject to regulatory reviews and approvals, including under the Hart-Scott-Rodino Act Hart-Scott-Rodino Act Often used in risk arbitrage. Antitrust act administered by U.S. Department of Justice and the FTC that requires an investor to file a form with the government before he acquires an economic interest in the lesser amount of $15 million or 15% of the ; approval by the shareholders of Business Objects; and certain other customary conditions. Thomas Weisel Partners Thomas Weisel Partners Group, Inc. (NASDAQ: TWPG), often shortened to just TWP or TWeisel, is a U.S. middle-market and growth focused investment banking firm based in San Francisco, California. LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control acted as financial advisor to Business Objects. Goldman, Sachs & Co. acted as financial advisor to Crystal Decisions. Conference Calls Business Objects and Crystal Decisions will hold two joint conference calls for investors and analysts to discuss the proposed transaction: -- For North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Asia-Pacific: Friday, July 18 at 2:30 PM Pacific time (5:30 PM Eastern time) -- For Europe: Monday, July 21 at 9:00 AM Paris time (8:00 AM London time) The dial-in numbers for the live conference calls are: -- From USA/Canada: (800) 399-7988 -- From overseas: (706) 634-5428 Replays of both calls will be available through Thursday, July 24, 2003. The dial-in numbers for the replays are: -- From USA/Canada: (800) 642-1687 -- From overseas: (706) 645-9291 -- Passcode for call 1: 1836528 -- Passcode for call 2: 1836540 Both calls will also be webcast, and an accompanying slide presentation will be available on www.businessobjects.com/investors. About Business Objects Business Objects is the world's leading provider of enterprise business intelligence (BI) solutions. Business Objects enables organizations to track, understand, and manage enterprise performance. The company's solutions leverage the information that is stored in an array of corporate databases, enterprise resource planning See ERP. (application, business) Enterprise Resource Planning - (ERP) Any software system designed to support and automate the business processes of medium and large businesses. (ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ), and customer relationship management (CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. ) systems. Popular uses of BI include management dashboards and scorecards, enterprise performance management applications, customer intelligence applications, enterprise reporting, financial reporting, and both customer and partner extranets. These solutions enable companies to gain visibility into their business, acquire and retain profitable customers, reduce costs, optimize the supply chain, increase productivity and improve financial performance. Business Objects provides the industry's most integrated business intelligence suite, called BusinessObjects Enterprise 6. This suite includes the industry's best web query, reporting, and analysis; the most advanced and complete suite of analytic applications Analytic Applications are a type of business application software, used to measure and improve the performance of business operations. More specifically, Analytic Applications are a type of Business Intelligence solution. ; and the best connectivity to packaged applications. Business Objects has more than 17,500 customers in over 80 countries. The company's stock is publicly traded under the ticker symbols Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors NASDAQ: BOBJ and Euronext Paris (ISIN code FR0004026250-BOB). It is included in the SBF SBF Studium Biblicum Franciscanum (Franciscan School of Biblical Investigations; Jerusalem, Israel) SBF Small Block Ford (automotive engine) SBF Single Black Female SBF Société des Bourses Francaises 120 and IT CAC See Consumer Advisory Council. 50 French stock market indexes. Business Objects can be reached at +1-408-953-6000 and www.businessobjects.com. About Crystal Decisions Crystal Decisions, a privately held company privately held company A firm whose shares are held within a relatively small circle of owners and are not traded publicly. , is a leading information management software company with more than 14 million licenses shipped. Since 1984, Crystal Decisions has powered winning organizations with one of the fastest ways for employees, partners and customers to access the information they need to make the best decisions and ultimately reduce costs and increase productivity. The Crystal brand is among the most trusted names in enterprise reporting and more than 355 Independent Software Vendors (ISVs) have standardized on Crystal Decision's solutions. Headquartered in Palo Alto, Calif., Crystal Decisions has more than 30 offices worldwide and can be found on the Internet at www.crystaldecisions.com.
KEY COMPANY FACTS
For the 12 months
ended 3/31/03
(in millions)
Business Objects Crystal Decisions
----------------- -------------------
License Revenues $237 $174
Total Revenues $466 $270
Operating Income $ 42 $ 38
Operating Margin 9% 14%
Net Income $ 38 $ 28
Cash & Cash Equivalents
As of 3/31/03 $329 $ 95
Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release and its attachments contains forward-looking statements that involve risks and uncertainties concerning Business Objects' proposed acquisition of Crystal Decisions, Business Objects' expected financial performance (including without limitation as described in the quotations from management in this press release), as well as Business Objects' strategic and operational plans. Actual events or results may differ materially from those described in this press release due to a number of risks and uncertainties. The potential risks and uncertainties include, among others, the possibility that the transaction will not close, that the closing may be delayed or that the companies may be required to modify aspects of the transaction to achieve regulatory approval; the reaction of customers of Business Objects and Crystal Decisions to the transaction; Business Objects' ability to successfully integrate Crystal Decisions' operations and employees; Business Objects' ability to transition Crystal Decisions' customers; the introduction of new products by competitors or the entry of new competitors into the markets for Business Objects' and Crystal Decisions' products; and economic and political conditions in the U.S. and abroad. More information about potential factors that could affect Business Objects' business and financial results is included in Business Objects' Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 2002 and Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarterly period ended March 31, 2003, including (without limitation) under the captions, "Risk Factors" and "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations," which are on file with the Securities and Exchange Commission (the "SEC") and available at the SEC's website at www.sec.gov, and will be included in Business Objects' Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003, which will be filed with the SEC in the near future. For more information and additional risk factors regarding Crystal Decisions, see the information under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Annual Report on Form 10-K for the fiscal year ended June 28, 2002, the Quarterly Report on Form 10-Q for the quarterly period ended March 28, 2003, and Crystal Decisions' Registration Statement on Form S-1 and all amendments thereto, initially filed by Crystal Decisions with the SEC on May 23, 2003. Neither Business Objects nor Crystal Decisions undertake any obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release. Additional Information About the Proposed Acquisition and Where to Find It Business Objects and Crystal Decisions intend to file with the SEC a joint proxy statement/prospectus/information statement and other relevant materials in connection with the proposed acquisition of Crystal Decisions by Business Objects. The joint proxy statement/prospectus/information statement will be mailed to the security holders of Business Objects and Crystal Decisions. Investors and security holders of Business Objects and Crystal Decisions are urged to read the joint proxy statement/prospectus/information statement and the other relevant materials when they become available because they will contain important information about Business Objects, Crystal Decisions and the proposed acquisition. The joint proxy statement/prospectus/information statement and other relevant materials (when they become available), and any other documents filed by Business Objects or Crystal Decisions with the SEC, may be obtained free of charge at the SEC's web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Business Objects by contacting Business Objects Investor Relations Investor relations The process by which the corporation communicates with its investors. , 3030 Orchard Parkway, San Jose, California San Jose (IPA: /ˌsænhoʊˈzeɪ/) is the third-largest city in California, and the tenth-largest in the United States. It is the county seat of Santa Clara County. , 95134, 408-953-6000. Investors and security holders may obtain free copies of the documents filed with the SEC by Crystal Decisions by contacting Crystal Decisions Investor Relations, 895 Emerson Street, Palo Alto, California “Palo Alto” redirects here. For other uses, see Palo Alto (disambiguation). Palo Alto (IPA: /ˌpæloʊˈʔæltoʊ/, from Spanish: palo: "stick" and alto: "high", i.e. , 94301, 800-877-2340. Investors and security holders of Business Objects are urged to read the joint proxy statement/prospectus/information statement and the other relevant materials when they become available before making any voting decision with respect to the proposed acquisition. Bernard Liautaud, Business Objects' Chairman and Chief Executive Officer, and certain of Business Objects other executive officers and directors may be deemed to be participants in the solicitation of proxies of Business Objects' stockholders in connection with the proposed acquisition. A description of the interests of Mr. Liautaud and Business Objects' other executive officers and directors in Business Objects is set forth in the Definitive Proxy Statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. for Business Objects' annual meeting of stockholders, which was filed with the SEC on April 8, 2003. Investors and security holders may obtain more detailed information regarding the direct and indirect interests of Mr. Liautaud and Business Objects' other executive officers and directors in the proposed acquisition by reading the joint proxy statement/prospectus/information statement when it becomes available. Jonathon Judge, Crystal Decisions' President and Chief Executive Officer, and certain of Crystal Decisions' other executive officers and directors may be deemed to be participants in the solicitation of proxies of Business Objects' stockholders in connection with the proposed acquisition. A description of the interests of Mr. Judge's and Crystal Decisions' other executive officers and directors in Crystal Decisions is set forth in the Preliminary Proxy Statement for Crystal Decisions' annual meeting of stockholders, which was filed with the SEC on July 9, 2003. Investors and security holders may obtain more detailed information regarding the direct and indirect interests of Mr. Judge and Crystal Decisions' other executive officers and directors in the proposed acquisition by reading the joint proxy statement/prospectus/information statement when it becomes available. BusinessObjects is a trademark of Business Objects S.A. Other company and product names may be trademarks of the respective companies with which they are associated. |
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