JSB Software Technologies plc Announces Expansion into Major Germanic Markets with Acquisition of CSM Security Management AG.

Business Editors

LONDON--(BUSINESS WIRE)--Aug. 7, 2000

JSB Software Technologies plc ("JSB")(EASDAQ:JSBS/London:JSB), a leading provider of Internet access control software, is pleased to announce the acquisition of CSM Security Management AG ("CSM"), a leading European-based provider of web content and email filtering software.

Highlights:

--Additional European presence and market penetration into the key
Germanic high-growth markets accelerating the Company's expansion
into Europe

--Addition of complementary non-English content database to enhance
value of all current SurfCONTROL product sets - 50% of Internet
content is expected to be non-English by 2003 with German being a
significant language

--Addition of base technology to address the rapidly expanding email
filtering market

--Highly valued OEM and development relationships with major
international corporations including Hewlett Packard and Biodata AG

--Addition of over 4000 European customers including major
corporations such as SAP AG, Commerzbank AG, Siemens AG, NESTLE
Deutschland AG, and METRO MGI Informatik GmbH and Bestfoods Germany

--Well-established distribution and reseller network giving further
access to European markets

--Increased resources including additional European sales operation
and personnel

--Addition of strong engineering team to enhance and consolidate
current and future product offerings with expertise in the areas of
Unix, Linux, WAP and 3G protocols

--Total consideration of US$17.3m: satisfied by the issue of 640,000
new ordinary shares subject to lock-up arrangements with staged
releases over 26 months: 50% released after September 2001 and 50%
after September 2002

Steve Purdham, Chief Executive Officer, JSB, commented, "CSM is an extremely welcome addition to the group and will accelerate our expansion into Europe by giving us immediate access to the major German-speaking markets. CSM brings with it a high quality team and products, and will further drive our goal of becoming the leading provider of Internet filtering software in these key European markets."

Michael Kofler, founder of CSM, said, "We are very excited to be joining a world leading organisation in the Internet filtering space. We believe that there are clear synergies between the two companies and we look forward to a successful future as part of JSB."

Introduction

CSM, based in Vienna, Austria is a leading European-based provider of web and email filtering software. The Company currently employs 38 people with offices in Vienna, Austria, Frankfurt, Germany and Leiden, Holland.

Reasons for the Acquisition

The acquisition represents the continued fulfillment of JSB's stated aim of growing the Company both by acquisition as well as organically and expands the Group geographically, into different market segments and provides additional technology. The Directors believe that the addition of CSM to the Group will provide the following benefits:

--Accelerate JSB's penetration of European Internet Access Control
markets, specifically the German-speaking markets, and further the
Company's goal of becoming a global leader in these markets. A recent
report by International Data Corporation on European Internet usage
projects that Germany will drive up to one third of growth in Western
Europe and predicts that Germany, currently with 4 million online,
will have 17 million users by the end of 2001.

--Adds the management resources now required to manage the Company's
regional growth. CSM brings with it a strong indigenous management
team and an established and regionally-focused sales and marketing
team.

--Increase JSB's reach into the European market via long-standing
VAR and distributor relationships with premier companies such as
Internet 2000 in Germany and Compumatica in Holland.

--Broaden JSB's overall product line by adding CSM's high end
stand-alone Proxy based filtering system and the entry-level Internet
Mail Scanner product. The addition of email filtering is consistent
with the Company's intention of providing a full range of software
solutions to organizations for the management of Internet Usage
Productivity and to build leveraged sales from a continually growing
customer base.

--Extend the Company's European-based engineering resources. CSM's
technical and development team of 13 engineers based in Vienna,
Austria, brings the Company additional and valuable design and
development talent, particularly in the areas of NT, Unix, Linux, WAP
and 3G protocols. Linux is a key market for the future and this
acquisition will further strengthen JSB's current range of new Linux
based products. For example, SurfControl will now be able to offer
additional Linux based filtering solutions on the Cobalt RaQ3i and
Qube2 platforms.

--Provide additional synergies with non-European markets currently
served by JSB. CSM has an extensive set of reseller relationships
in the US, Australasia, Japan, and Latin America.

Customers

CSM has approximately 4,500 European customers and over 7000 customers worldwide which span the corporate, education and ISP market segments. These include SAP AG, Phillips, Commerzbank AG, Siemens AG, Sony, NTT, NESTLE Deutschland AG, and METRO MGI Informatik, GmbH, and Bestfoods Germany. Of this 75% are located with the German speaking markets of Austria, Switzerland and Germany.

In addition, CSM has customers in Japan and the Asia Pacific and an established customer base in the US, Latin America and Australia, which has been generated through the Company's OEM and reseller relationships.

Reseller and Distribution Partners

CSM has an extensive distribution network which has enabled the Company to build up its customer base throughout the world. The majority of sales are generated through this distribution network which in turn serves an extensive reseller network. Distributors within Europe include Internet 2000, Articon Integralis, and BW Digitronik, which together provide access to over 600 resellers in Europe. In addition, CSM has direct relationships with 180 resellers in the European market.

CSM also has an OEM agreement with Biodata AG and a development agreement with Hewlett Packard.

In the rest of the world, CSM has direct relationships with 22 resellers in the Asia Pacific and 7 in the Middle East. CSM's relationship with MicroNet gives the company access to over 120 resellers in Japan.

Products

CSM develops and markets a range of products covering the access control, URL filtering and email filtering markets. These products will be incorporated into JSB's existing product range and enhance the Company's offering in the German speaking markets. The addition of CSM's email filtering product will bring a new capability to JSB's product range in a fast growing market. These are:

CSM Internet Mail Scanner - Gateway based solution for SMTP,
providing spam protection, relay checking, virus scanning, and other
content filters.

CSM SiteBlocker - an Internet Access Control solution utilizing a
categorized list of web sites of English and German languages.
Currently the list contains approximately 700,000 referenced web sites
across 17 content categories. This will significantly add to the full
range of SurfCONTROL products and will provide a key competitive
advantage over the Company's main competitors.

CSM Enterprise - a fully functional proxy server based Internet
management solution providing caching, access control, URL filtering,
and email filtering.

Management

This acquisition brings an established team with a strong reputation for technology and support in the main Germanic markets, and experienced management in R&D, marketing and finance.

Technology

CSM's range of products are currently available on Win 95/98, NT, HP-UX, Sun- Solaris, Linux. Also compatible with MS Proxy, CheckPoint Firewall 1, and Cobalt's RaQ3i and Qube2.

Financials

CSM's audited revenues for the year to 31 December 1999 were US$1.7m with a net loss for 1999 of US$109,000. Net assets as at 31 December 1999 were US$109,000.

Terms of the Acquisition

CSM will be acquired for a total consideration of US$17.3m: satisfied by the issue of 640,000 new ordinary shares, based on a price of (pound)18.10 which was the closing price on Thursday 3rd August. Of this, 17,000 shares are held back conditional upon CSM meeting certain closing net asset conditions. As part of the agreement, the shares are subject to lock-up arrangements with staged releases over 26 months: 50% released after September 2001 and 50% after September 2002.

Notes to editors

About JSB

JSB Software Technologies plc (EASDAQ:JSBS/London:JSB), which recently announced its intention to change its name to SurfControl plc, is a world leader in Responsible Internet Usage offering a complete line of Internet filtering solutions for use in the home, education and the corporation. The SurfControl family of products employs expert filtering, Pass-Through, and Pass-By technologies to create a productive Internet environment in the workplace and a child safe room on the Internet at home and at school.

This comprehensive line of Internet monitoring and policy management solutions includes SuperScout- the market leader in Internet productivity in the corporation; CyberPatrol - the market leader in responsible Internet usage in the home and at school; and the SurfControl Software Developers Kit - the proven filtering solution for ISPs, Search Engines, Internet Appliances and ASPs.

JSB works with a variety of partners such as AltaVista, CheckPoint Software (NASDAQ:CHKP), Cisco Systems (NASDAQ:CSCO), Google, Hewlett Packard (NASDAQ:HWP), IBM (NASDAQ:IBM), ICSA, Microsoft's Web TV (MSFT), Netscape (NASDAQ:NCSP), WorldGate (NASDAQ:WGAT), and YAHOO! (NASDAQ:YHOO).

JSB employs over 200 people worldwide and has offices in the USA in California and Massachusetts; in the UK in Manchester and London; and in Rotterdam, Holland.

For further information and news on SurfControl, please visit http://www.surfcontrol.com.