Dassault Systemes -DS- to Acquire ABAQUS Inc. to Create Next-Generation Solutions for 3D Realistic Simulation; DS Announces SIMULIA as the Unified Scientific Simulation Platform

Business Wire, May 17, 2005

PARIS & PROVIDENCE, R.I. -- Dassault Systemes (Nasdaq: DASTY; Euronext Paris: #13065, DSY.PA) today announced an agreement to acquire ABAQUS Inc. in an all-cash transaction approximating $413 million, subject to certain adjustments at closing. ABAQUS is the established leader in nonlinear finite element analysis software. DS expects the planned acquisition to be immediately accretive to net income, excluding acquisition costs and the impact of deferred revenue accounting treatment. DS is also unveiling SIMULIA, a scientific, open platform that will enable the integration of all types of simulation applications.

ABAQUS and DS will make realistic simulation accessible to a wider audience and greatly increase ease of use. With this initiative, DS will also diversify into markets beyond its existing manufacturing base. The ABAQUS purchase is a significant step to reshape the large but currently fragmented simulation software market, in which most companies still use niche applications rather than unified solutions. According to industry analysts, the simulation software market is estimated at $2.35 billion today and is expected to grow to $4 billion in the next five years, with average growth of 12 percent per year. Many applications currently in use are internally developed programs, and current market figures do not take those applications into account.

ABAQUS is well recognized for its best-in-class technology, which companies are increasingly seeking, that is capable of scaling from simple to the most demanding simulations. For example, a simple drop-test simulation enables users to observe the behavior of all of the internal components of a mobile phone. DS will also benefit from ABAQUS's tremendous intellectual capital, embodied by its world-class technology team including 70 PhDs.

"With the best teams, we can transform the industry," said Bernard Charles, president and CEO, Dassault Systemes. "We warmly welcome the impressive ABAQUS team. Together, we will enable our customers to experience virtually what their customers will experience using their products in the real world."

"I am delighted and enthused that Dassault Systemes has selected ABAQUS as the foundation of its strategic investment in simulation technology," said Mark Goldstein, president and CEO, ABAQUS Inc. "As companies continue to adopt performance-centric practices as a fundamental component of product design, the role of simulation will become ever more important to the success of an enterprise. I look forward to the contribution that ABAQUS technologies will bring to Dassault Systemes' PLM solutions while at the same time maintaining our focus on delivering industry-leading advanced finite element solutions to the PLM market in general."

"With total revenues approaching the $100 million threshold on an annual basis, ABAQUS has a high level of both software and recurring software revenue," said Thibault de Tersant, executive vice president and CFO, Dassault Systemes. "Moreover, ABAQUS has a strong level of profitability, which should enable the acquisition to be immediately accretive to earnings excluding acquisition costs and the impact of deferred revenue accounting treatment."

Dassault Systemes estimates that the impact of deferred revenue write-down, as part of purchase accounting adjustments, may result in a loss of revenue of approximately $20 million within twelve months of the completion of the proposed acquisition of ABAQUS.

The transaction is subject to the satisfaction of certain customary conditions and approval by certain regulatory authorities. Neither Dassault Systemes nor ABAQUS will require a shareholder vote. Dassault Systemes expects that the proposed acquisition could be completed by the end of its third fiscal quarter.

SIMULIA will be the new unified, open platform supporting all simulation domains. It will accelerate innovation by supporting the capture and deployment of best practices for predicting product behavior, as well as reduce the cost of ownership for scientific applications. SIMULIA will also give users access to simulation capabilities without requiring the steep learning curve of disparate, traditional simulation tools.

SIMULIA will have the largest open ecosystem available in the simulation market by including the DS Component Application Architecture V5 (CAA V5) ecosystem and existing ABAQUS partners.

"Dassault Systemes' acquisition of ABAQUS--the gold standard for nonlinear simulation--marks a new beginning for simulation," said Charles Foundyller, president and CEO of Daratech, Inc. "This could be the tipping point that ushers simulation into the mainstream of PLM. For this reason, I expect Dassault Systemes' vision for SIMULIA to be widely accepted throughout the manufacturing industry and beyond."

Statements above that are not historical facts but express expectations or objectives for the future, including but not limited to the statements regarding the Company's expectations that the proposed acquisition, if completed, would be immediately accretive to earnings excluding acquisition costs and the impact of deferred revenue accounting treatment and the level of deferred revenue write-down are forward-looking statements (within the meaning of Section 21E of the 1934 Securities Exchange Act, as amended). Such forward-looking statements are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results or performances may differ materially from those in such statements due to, among other factors: (i) currency fluctuations, (ii) reduced corporate spending on IT infrastructure as a result of changing economic or business conditions that could negatively affect market demand for our products and services, (iii) difficulties or adverse changes affecting our partners or our relationships with our partners, including our longstanding, strategic partner, IBM, (iv) new product developments and technological changes, (v) errors or defects in our products and (vi) risks related to the acquisition Unfavorable changes in any of the above or other factors described in the Company's SEC reports, including the Form 20-F for the year ended December 31, 2003, which was filed with the SEC on June 30, 2004, could materially affect the Company's financial position or results of operations.