Borland to Acquire Software Quality Company, Segue Software; Announces Plan to Divest IDE Product Lines; Company Sets Course for Accelerating Execution of Its Software Delivery Optimization Vision

Business Wire,  Feb 8, 2006  

Tags: Borland Software Corp., IDE, Segue Software, software

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CUPERTINO, Calif. -- Borland Software Corporation (NASDAQ:BORL) today announced aggressive plans to drive its Application Lifecycle Management (ALM) business forward. As part of that plan, Borland has agreed to buy Segue Software Inc. (NASDAQ:SEGU), the Massachusetts-based provider of global software quality and testing solutions. In addition, Borland announced plans to seek a buyer for the portion of its business associated with the Integrated Development Environment (IDE), including the award-winning Borland Developer Studio (Delphi(R), C++Builder(R) and C#Builder(R)) and JBuilder(R) product lines.

Both actions are significant milestones in Borland's strategy to secure leadership in the growing ALM sector and expand its ability to offer organizations solutions that make software delivery a more predictable and manageable business process.

"Segue's quality optimization products and services will add significantly to our growing portfolio of application lifecycle management solutions," said Tod Nielsen, Borland president and chief executive officer. "This is a natural extension of our focus to expand beyond development and into software delivery, helping companies increase business value through successful software initiatives."

Nielsen continued: "The decision to expand our emphasis on ALM, and at the same time enable our IDE business to get the attention it deserves, enables us to do what's right for our business, what's right for our customers, and what's right for the future of software development."

Borland and Segue have entered into a definitive merger agreement in which Borland would acquire Segue in a one-step merger transaction for $8.67 per share in cash, and anticipates the transaction to close in the second calendar quarter. Concurrently with the execution of the merger agreement, Borland entered into voting agreements with certain significant Segue shareholders who own an aggregate of 21.5% of Segue's outstanding shares and who have agreed to support the transaction. The transaction is valued at approximately $100 million and will be funded with existing cash on hand.

Borland's Solution-Oriented Approach to Improving Software Delivery Processes

Borland's ALM solutions play a critical role in helping enterprises manage the complexity of software development and delivery, by providing business, development and operational teams with increased visibility and control over all phases of the software lifecycle. This is especially crucial for large enterprises working within heterogeneous and distributed environments. IDC forecasts the ALM market to grow to $3.3 billion in 2009, achieving a 9.2% compound annual growth rate (CAGR) for 2004-2009(1).

Over the past three years, Borland has built out its ALM portfolio to include products and services for project and portfolio management, demand management, requirements management, software configuration and change management and modeling, among other areas. In 2006, Borland intends to leverage these assets, its industry-leading process optimization and educational service offerings, and the expertise and technology it plans to acquire from Segue, to offer a series of packaged and personalized solutions that enable customers to improve the most critical process areas within software delivery. These areas of focus include:

--IT Management and Governance

--Requirements Definition and Management

--Change Management

--Lifecycle Quality Management

By increasing the maturity of these processes, companies can better manage complexity, while also mitigating the risk of external pressures such as compliance mandates, shifting business priorities and industry consolidation. Borland intends to roll out comprehensive solution offerings for each of the above mentioned processes throughout 2006. Each solution offering will be an integrated package of Borland's ALM technology, process optimization services and skills training, all tailored to the customers' unique needs and goals. This holistic and customized approach allows enterprises to more easily align people, process and technology so they can deliver quality software with maximum business value.

Borland and Segue Team on Lifecycle Quality Management

Segue Software, headquartered in Lexington, Mass., is an expert in delivering solutions to define, measure, manage and improve software quality throughout the entire application lifecycle. Upon completion of this acquisition, Segue will bring to Borland its comprehensive line of quality optimization and performance management products, a global team with deep understanding of the quality and testing space, and a significant customer base representing a wide range of industries and Fortune 100 companies.

Segue's software quality optimization solutions and industry expertise will further extend Borland's leadership in the ALM space, complementing Borland's existing product set and worldwide service offerings. Segue's state-of-the-art Silk product line will also play a central role in Borland's upcoming Lifecycle Quality Management Solution, which looks to infuse quality throughout the lifecycle, addressing the root cause of quality problems versus reacting to symptoms later in the process when they are more costly. Segue's technology will also be a key element of future versions of Borland's integrated ALM platform.