Selectica to Merge with I-Many, an Enterprise Contract Management Leader; Combined Company to Target Expanding Opportunities in the Buy and Sell Side Contract Compliance Market

Business Wire, Dec 3, 2004

SAN JOSE, Calif. & EDISON, N.J. -- Selectica, Inc. (Nasdaq: SLTC), a leading provider of solutions for automating the sales Opportunity-to-Order process, and I-many, Inc., (Nasdaq: IMNY), a leading provider of advanced business solutions for Enterprise Contract Management and Corporate Commitments, today announced that they have entered into a definitive agreement to merge. The combined company will have a comprehensive suite of products designed to lead the emerging multi-billion dollar market for automating revenue-centric processes for global enterprises engaged in both sell-side (customer facing) and buy-side (supplier facing) transactions.

Under the terms of the agreement, Selectica will pay $1.55 per share in cash for all outstanding shares of I-many common stock, for a total transaction value of approximately $70 million. The transaction has been unanimously approved by the boards of directors of both companies and is subject to customary closing conditions, including regulatory review and the approval of I-many's stockholders. Certain executive officers of I-many have entered into agreements to vote their I-many shares in favor of the transaction. The transaction is expected to close in the first calendar quarter of 2005.

With approximately 280 customers and $40 million in revenues in the trailing four quarters, I-many is recognized as the leading provider of software and related professional services that enable companies to manage critical aspects of their contract-based, business-to-business relationships. I-many's comprehensive solutions manage any type of commitment from contracts and obligations to payments and collections, maximizing revenue and delivering meaningful cost savings. I-many's customers span a broad cross-section of industries and include recognized leaders such as Eli Lilly, GlaxoSmithKline, Procter & Gamble, Frito-Lay, and Honeywell Aerospace.

Key benefits of this transaction are anticipated to include the following:

--The most comprehensive solution for the enterprise compliance market, including configuration, price execution, quote management, contract management, contract compliance, regulatory compliance, revenue management, and prescriptive analytics.

--A significant increase in size and scale for the combined company, with more than $70 million of revenue over the last twelve months.

--The addition of a healthy, growing business that recorded a pro forma profit of more than $1 million for the nine months ended September 30, 2004. I-many's pro forma net income/(loss) per share differs from GAAP loss per share as it excludes impairment of goodwill and acquired intangible assets, amortization of acquired intangibles, depreciation expense, non-cash option and warrant charges, in process research and development and restructuring and other charges.

--The combination of a larger revenue base and potential cost savings are projected to accelerate profitability and provide future earnings leverage. Opportunities to eliminate duplicate functions and expenses are projected to yield cost savings of at least $10 million in the first year of combined operations. The combined company is expected to be profitable for the first full year of operations, excluding transaction-related charges, restructuring costs, and amortization associated with acquired intangibles and other purchase accounting adjustments.

--The acquisition is expected to be accretive to earnings per share in the first year of operation following the closing.

--An installed base of more than of 350 industry leading customers in several vertical markets including Manufacturing, Life Sciences, Telecommunications, Consumer Packaged Goods, Food and Beverage, Retail and Financial Services.

--The combination of the two experienced management teams: Vince Ostrosky of Selectica will serve as Chairman, President, and CEO of the combined company; A. Leigh Powell, I-many's Chairman and CEO, will move to a new role as President of the Life Sciences Division; Terry Nicholson, I-many's COO, will move to a similar role in the new organization; Stephen Bennion, Selectica's CFO, will become CFO of the combined company.

"This combination will extend our sales configuration and pricing solutions into an adjacent market where we see significant growth," said Vince Ostrosky, CEO of Selectica. "We've observed a rapidly growing need for businesses to achieve much tighter control of their revenue-centric business processes and to enforce contractual as well as regulatory compliance, including Sarbanes-Oxley. To solve this critical business challenge, a solution must combine a robust pricing engine - which is one of Selectica's key strengths - with the ability to effectively manage the contract lifecycle - which is I-many's specialty. We believe our combined expertise and rich suite of products will enable us to offer enterprises a cost-effective system of record for products, pricing and contracts allowing us to capitalize on significant revenue opportunities on both the buy-side as well as the sell-side of the enterprise. We also believe that I-many's strong presence in the Life Sciences market is very positive and we will continue to focus on this vital market segment with new products and services.