Captiva Acquires ADP Context; Product Line Will Augment Captiva's Medical Insurance Claims Processing Offerings.

Business Editors/High-Tech Writers

SAN DIEGO--(BUSINESS WIRE)--Jan. 29, 2004

Captiva Software Corp. (NASDAQ:CPTV), a leading provider of input management solutions, today announced it has signed a definitive agreement, effective Feb. 1, 2004 to acquire ADP Context Inc., a business unit of ADP Claims Solutions Group Inc. (CSG) and a part of the worldwide Automatic Data Processing Inc. (NYSE:ADP) family of companies. ADP Context provides automated software solutions to complex medical claims coding, editing and reimbursement challenges in the healthcare industry. ADP Context's solutions will enable Captiva to better serve its claims processing customers and expand its reach in the healthcare insurance market.

The acquisition, completed through an all-cash transaction valued at approximately $5.2 million, is expected to contribute at least $4 million of incremental revenue during the remainder of 2004 and be accretive on both a pro forma and GAAP basis. Additional details of the acquisition will be discussed by Captiva management in the company's Q4 2003 earnings conference call scheduled for 1:30 p.m. PST (4:30 p.m. EST) on Wednesday, Feb. 4, 2004. During the call, management will provide guidance for Q1 2004 and 2004 as a whole that includes the financial impact of this acquisition.

"The acquisition of ADP Context is a natural progression for Captiva. It expands our presence and application expertise in the payor side of the healthcare market by allowing us to offer more solutions to our large customer base, and extends our reach into the provider side of this market. In addition, since ADP Context's solutions streamline the processing of electronic medical claims, they complement ClaimPack's ability to process paper based medical claims," said Reynolds C. Bish, president and CEO of Captiva. "ADP Context is a growing, profitable company with a substantial recurring revenue stream, outstanding products, talented employees and a strong customer base. We look forward to welcoming its employees and customers to Captiva and jointly building an even more successful combined company."

Founded in 1988 and based in Westmont, Ill., ADP Context develops and markets automated solutions to help solve complex medical claims coding, editing and reimbursement challenges in the healthcare industry. Such solutions include CodeLink(TM), claims coding software for increased processing accuracy, Claims Editor(TM), a provider editing application designed to enhance claim billing systems, FirstPass(TM), a Web-based payor editing application that previews claims prior to their being entered into claim management systems and approximately 75 knowledge products offering a variety of content. These products empower healthcare providers and payors to reduce errors, claim denials, resubmissions, write-offs, run-away losses and claim handling costs. More than 1,400 physician practices, hospitals, insurance carriers, administrators and managed care organizations currently use ADP Context products. The company has approximately 35 employees.

"We look forward to being a part of Captiva," said Mark Earles, ADP Context's vice president and general manager. "Together, our products offer a very compelling combination of medical claims processing capabilities and better position us to serve the needs of our customers and prospects."

About Captiva

Captiva Software is a leading provider of input management solutions. Since 1989, the company's award-winning products have been used to manage business critical information from paper, faxed and electronic forms, documents and transactions into the enterprise in a more accurate, timely and cost-effective manner. These products automate the processing of billions of forms, documents and transactions annually, converting their contents into information that is usable in database, document, content and other information management systems. Captiva's technology serves thousands of users in insurance, financial services, government, business process outsourcing, manufacturing and other markets. For more information, visit www.captivasoftware.com.

This press release may contain forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, among other things, any projections of earnings, revenues (including where the underlying contract has already been signed), or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include, among other things, successful integration of ADP Context into Captiva's business (including integration of product lines), performance of contracts by customers and partners; employee management issues; the timely development, production and acceptance of products and services and their feature sets; the challenge of managing asset levels, including inventory; the flow of products into third-party distribution channels; and the difficulty of keeping expense growth at modest levels while increasing revenues. Announcements of contract awards should not be interpreted as reflecting revenue in any particular period and may relate to revenue recorded in prior periods. These and other risks and factors that could cause events or our results to differ from those expressed or implied by such forward-looking statements are described in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q, as well as other subsequent filings with the Securities and Exchange Commission. We assume no obligation and do not intend to update these forward-looking statements.