Acquisition: Computer Associates To Acquire PLATINUM Technology in Largest Software Deal in History. Cash Transaction, Valued At More Than $3.5 Billion, To Complement CA's Technology and Services - Company Business and Marketing

Edge: Work-Group Computing Report, April 5, 1999

In the largest transaction in the history of the software industry, Computer Associates International, Inc. (NYSE:CA) and PLATINUM technology International, inc. have entered into a merger agreement for CA to acquire PLATINUM through a cash tender offer. A wholly-owned subsidiary of CA will offer to purchase all outstanding shares of PLATINUM's common stock for $29.25 per share.

The merger has been unanimously approved by the Boards of Directors of both PLATINUM and CA. CA will fund the acquisition through a $4.5 billion credit facility underwritten entirely by Credit Suisse First Boston. This new facility will replace CA's existing $2.6 billion lines of credit.

"This transaction provides tremendous synergies in products, markets and services with very little overlap, creating exciting growth opportunities for CA in many new and emerging markets," said CA President and COO Sanjay Kumar. "PLATINUM's leadership in knowledge management, data warehouse, data base tools and application lifecycle management perfectly complements the e-commerce management and development technologies embodied in Jasmine, CA's object-oriented database. By enabling organizations to easily create knowledge portals, CA will become the premier end-to-end solutions provider for building and deploying enterprise applications."

"In addition, many organizations around the world are already enjoying the benefits of the integration between PLATINUM's best-of-breed point solutions and CA's flagship Unicenter TNG's management framework," Kumar said "We look forward to building a collectively stronger enterprise that can provide a broader range of solutions to clients, greater opportunities for employees from both companies, and accelerated near and long-term shareholder return."

PLATINUM provides software products and consulting services that help Global 10,000 companies manage and improve their IT infrastructures--including systems and database management, e-commerce, application infrastructure management, data warehousing, knowledge management, decision support, and year 2000 reengineering. The 12-year-old company has more than 120 offices across six continents.

"PLATINUM, its management and employees are extremely proud of the world-class organization we have built over the past 12 years," said Andrew "Flip" Filipowski, president and CEO of PLATINUM. "We have strived hard to service our customers, provide great opportunities for our employees, and deliver superior returns to our shareholders. As we approach the new millennium, it is increasingly apparent that consolidations in our industry make it evident that this change is critical to PLATINUM's future.

"CA's recognition of PLATINUM's true value combined with its commitment to fairly compensate our shareholders makes this transaction a compelling value proposition for everyone involved," said Filipowski. "The combination of CA's technology, operational skills and market reach together with PLATINUM's technology and people, create the model software and services provider for the next century. We're confident that, given our intensive discussions with CA over the past week, this alliance will be extremely beneficial to our clients and employees. CA's track record of developing and integrating leading-edge products should give our clients confidence in the future when managing their mission-critical systems."

"After over a decade of building PLATINUM," said Filipowski, "I'm pleased, confident and relieved that the organization we have built, along with our customers and people, will be in the extremely capable hands of CA, its people and management team."

PLATINUM's wide-ranging consulting and implementation services will also complement CA's rapidly-growing Global Professional Services (GPS), formed last April in response to increased client demand for turnkey best-of-class solutions. PLATINUM's consultants will quickly extend GPS' capabilities, especially in Europe, where PLATINUM has a significant presence.

In the tender offer, CA seeks to purchase at least a majority of PLATINUM's outstanding shares. Consummation of the tender offer will be subject to the expiration or termination of any applicable antitrust waiting period and the receipt of all regulatory approvals. Following completion of the tender offer, the subsidiary of CA will be merged into PLATINUM, and all of PLATINUM's shares not owned by CA will be converted into the right to receive $29.25 per share in cash. CA estimates that, following the completion of the merger and restructuring, this transaction will be accretive to net earnings in the first 12 months in the amount of about 25 cents per share, excluding in-process R&D and restructuring charges. In addition, the company anticipates that following the restructuring, the acquisition will generate an additional $450 million of cash from operations.

CA was advised on this transaction by the law firm of Howard, Smith and Levin. Advisors for PLATINUM were Credit Suisse First Boston and the law firm of Katten Muchin & Zavis.