Sybase and Powersoft sign definitive merger agreement; Merger of fastest growing database and tools companies creates the worldwide leader in client/server software.

BOSTON--(BUSINESS WIRE)--Nov. 14, 1994--Sybase Inc. (NASDAQ:SYBS) and Powersoft Corp. (NASDAQ:PWRS) Monday jointly announced that the companies' boards of directors have unanimously approved a definitive agreement to merge and create the worldwide leader in client/server software.

Under terms of the merger agreement, Powersoft shareholders will receive 1.6 Sybase shares for each Powersoft share. The transaction is expected to be tax-free to both companies' shareholders and to be accounted for on a pooling-of-interests basis. The merger is subject to a number of standard conditions including regulatory approvals and approval by the stockholders of each company.

Mark Hoffman, Sybase chairman, chief executive officer and president, commented, "This merger will create the worldwide leader in client/server software. Separately, Sybase and Powersoft now have the number one positions in client/server tools, database connectivity, and based on our third quarter numbers, the highest growth rate for database servers. The combination of the two companies strengthens our expertise, distribution, and product solutions to scale from the desktop to the enterprise."

The combined company will have trailing 12 months revenues (third quarter, 1994) of $730 million, making it the seventh largest software company in the world. Its combined year-over-year growth rate of 75% makes it the fastest growing company of the top 10 software companies worldwide. Based on balance sheets as of Sept. 30, the combined company will have over $236 million in cash and equity of approximately $365 million.

Company Operations

Under terms of the agreement, Powersoft will operate as an independent subsidiary of Sybase Inc. David Litwack, Powersoft president, will report to Dave Peterschmidt, Sybase chief operating officer. Mitchell Kertzman, Powersoft CEO, will report to Mark Hoffman. Kertzman and one other Powersoft director, to be named, will hold new seats on the Sybase board.

The merged company will continue its commitment to open systems. Powersoft will remain an open database tools provider. Sybase will continue its strategy of working with multiple tools -- those of other independent client/server tools companies as well as its own. Sybase's Windows application development tool, Build Momentum, will be held in controlled release, pending exploration of product synergies.

Kerzman commented, "Powersoft and Sybase have had a long-standing partnership which underscores the strength of this merger. The biggest winners are customers who will have the best of both worlds. They can do business with a single source for the broadest range of the best client/server products. Alternatively, customers requiring open solutions can be secure in the knowledge that the products they choose from Powersoft and Sybase are the best in their class and will interoperate with all other RDBMS, tools, and connectivity products."

Leaders in Client/Server

Sybase Inc. is one of the fastest growing suppliers of client/server-based software products and services worldwide. The company is the second largest RDBMS vendor worldwide, and the leading provider of database connectivity/interoperability software.

Sybase develops and markets the System 10 family of database servers, connectivity software, and database administration products; the Momentum family of application development tools; and Intermedia interactive multimedia products.

Powersoft develops and markets the Powersoft Enterprise Series, the first family of scalable tools that encompasses the application development and data access needs of professional developers and end users across the enterprise. According to The META Group, an independent market research/consulting firm, Powersoft is the leading client/server tools company, with approximately 40% market share worldwide.

Complementary Strengths

Sybase and Powersoft share a commitment to open architecture and have complementary strengths and focuses on the client/server industry. In terms of products, Sybase has concentrated on servers, while Powersoft's emphasis is on the client.

From a platform perspective, Sybase's focus has historically been UNIX, with a growing installed base of Novell NetWare, Microsoft Windows NT, and OS/2. Powersoft's strength has been products for PCs running MS Windows, with recently announced support for UNIX and Macintosh platforms.

Sybase's distribution is primarily through its direct sales organization, complemented by VARs, systems integrators, and international distributors. Powersoft's focus has been on resellers, complemented by a direct sales force.

Both companies share a common vision of open architecture, with Sybase's focus on providing database connectivity products and ensuring support for multiple tools, and Powersoft committed to supporting the leading RDBMSs and other client/server development technologies.

Both companies develop and market key products in addition to those listed above. Sybase provides a full line of client/server tools, connectivity, database administration and interactive multimedia products.

Watcom, a division of Powersoft, develops and markets high performance application development tools and databases, including language products and Watcom's PC-based client/server SQL database servers.

Leveraging Customer and Distribution Synergies

Sybase and Powersoft have worked cooperatively for the past four years to provide solutions to customers. Powersoft estimates that 50% of its customer base uses Powersoft tools with SYBASE SQL Server databases. Sybase estimates that 30% of its SQL Server customers develop applications with Powersoft tools.

Sybase and Powersoft will leverage their respective distribution and partner strengths. The combined company will have more than 2,000 independent software vendor and application partners. Sybase markets its products worldwide through its direct sales force, telesales, distributors, OEMs, VARs, and systems integrators.

The company currently has more than 35 North American sales offices and 15 subsidiaries and 27 distributors worldwide. Powersoft markets its products worldwide through resellers, international distributors, and a direct sales force.

Specifically, Powersoft has approximately 450 value added resellers in North America, 600 resellers worldwide and a direct sales organization of approximately 150 in North America. Internationally, Powersoft has eight subsidiaries and 17 distributors.

Financial Strength

Sybase, headquartered in Emeryville, Calif., reported 1993 sales of $427 million, an increase of 61% over 1992. Its revenues for the last 12 months through the third quarter of 1994 were $617 million, representing a year-over-year growth rate of 67%.

Powersoft, headquartered in Concord, Mass., reported 1993 sales of $57 million, an increase of 118% over 1992. Its revenues of the last 12 months through the third quarter of 1994 were $113 million, representing a year-over-year growth rate of 146%.

Sybase Inc. is being advised in this transaction by Bear, Stearns & Co. Inc., and Unterberg Harris. Powersoft is being advised by Goldman, Sachs and Co.

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Note to Editors: SYBASE, SQL Server, Build Momentum, Momentum, Intermedia and System 10 are trademarks of Sybase Inc. Powersoft and PowerBuilder Enterprise are trademarks of Powersoft Corp. Watcom is a registered trademark of Watcom International. All other company and product names may be trademarks of the respective companies with which they are associated.

CONTACT: Sybase Inc., Emeryville, Calif.

             Kathy Nyrop, 510/922-3500 (Investor Relations)
             Robert Manetta, 510/922-3500 (Trade Analysts/Press)
             Sybase/U.K.
             Charles Nicholls, 44-628-597-269
             Blanc & Otus
             Carmen Hernandez, 415/512-0500
             Powersoft Corp., Concord, Mass.
             Susan Schechter, 508/287-1500 (Investor Relations)
             Patricia Colpitts, 508/287-1500 (Trade Analysts/Press)
             Powersoft Corp./U.K
             Alison Henderson, 44-628-345-00
             Lois Paul & Partners
             David Grip, 617/862-4514