AUTONOMY CORPORATION PLC ANNOUNCES AGREEMENT TO ACQUIRE VERITY, INC.
Proposed $500 million acquisition of Verity, Inc.
CAMBRIDGE, ENGLAND - 4 November 2005 - Autonomy Corporation plc, a global leader in infrastructure software, and Verity, Inc., a leading provider of business search and process management software, today announce that they have entered into a definitive agreement under which Autonomy will acquire Verity.
Acquisition Highlights
Under the terms of the Acquisition Agreement, it is proposed that Verity stockholders will receive $13.50 in cash for each outstanding Verity share, representing a premium of 30% to the closing share price of $10.37 on 3 November 2005.
Aggregate consideration of approximately $500 million (assuming exercise of all vested in-the-money Verity share options), funded by certain capital raising measures, a term loan and a portion of Verity and Autonomy's cash reserves. Post-closing Autonomy expects to have a cash balance of at least $65 million.
Dr. Mike Lynch, Autonomy group CEO and co-founder, will continue as Chief Executive Officer of the expanded group. Anthony Bettencourt, CEO of Verity, will assume the position of CEO, Autonomy, Inc., the U.S. subsidiary of Autonomy. Stouffer Egan, current CEO, Autonomy, Inc., will move to Autonomy group and assume the position of Autonomy group Chief Strategy Officer
All shareholding directors and executive officers of Autonomy and Verity have agreed to vote in favour of the Acquisition
The Transaction is expected to complete in late 2005 and is subject to Autonomy and Verity shareholder and regulatory approvals and other customary closing conditions
Commenting on the Acquisition, Dr. Mike Lynch, Group CEO of Autonomy, said: "This is a transformational acquisition for Autonomy. The combination of Verity's core competencies within IDOL will extend the adoption of our Intelligent Data Operating Layer as the standard for handling all forms of unstructured information. We are bringing together two world-class companies that will substantially increase our scale and diversify our revenue streams. We believe the Acquisition will enable us to provide a significantly enhanced product offering to both companies' clients, whilst continuing to lead innovation in the industry. We are looking forward to working together with the extremely talented teams at Verity and offering all of our customers the benefits of automation."
"By Verity uniting with Autonomy, our combined 16,000 customers will benefit from the blend of technology leadership and customer-facing strengths in sales, support and professional services, all under one corporate banner," said Anthony Bettencourt, Verity Chief Executive Officer. Mr. Bettencourt continued: "Autonomy's technology has been designed over the years to be compatible with Verity's products as is evidenced in existing joint customers. The combination will make available to each company's customers the next generation technology and most advanced suite of functionality, whilst protecting investments in Verity's products."
Acquisition Terms
Under the terms of the Acquisition Agreement, Verity stockholders will receive $13.50 in cash for each outstanding Verity share, representing aggregate consideration of approximately $500 million (assuming exercise of all vested in-the-money Verity share options). The cash portion of the consideration will be funded through the proceeds of a rights issue (which is not open to US shareholders, subject to certain exceptions), a term loan of up to $60 million and Verity's and Autonomy's existing cash resources. The Acquisition is conditional upon, inter alia: (i) approval by Verity shareholders; (ii) approval by Autonomy shareholders at an Extraordinary General Meeting, notice of which will be sent to Autonomy shareholders in due course; and (iii) regulatory approvals, including antitrust approvals. The terms of the Acquisition have been unanimously approved by the Boards of Directors of both companies. Verity has agreed to pay a break-up fee to Autonomy of $12 million payable under the Acquisition Agreement upon certain termination events. Autonomy may be required to pay a break-up fee to Verity of $6.7 million under the Acquisition Agreement in limited circumstances relating to breach of financing obligations.
Timetable
Autonomy intends to send materials to Autonomy shareholders in due course. Assuming all conditions are satisfied, Autonomy currently expects the Acquisition to complete in late 2005.
Enquiries:
Autonomy Financial Media Contacts:
Autonomy Analyst and Investor Contacts:
Edward Bridges
Financial Dynamics
+44 (0)20 7831 3113
This announcement does not constitute, or form part of, an offer to sell, or the solicitation of an offer to subscribe for or buy any securities to be issued or sold in connection with the transactions described herein.
This announcement does not constitute, or form part of, an offer to sell or the solicitation of an offer to subscribe for or buy any securities, nor the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issue or transfer of the securities referred to in this announcement in any jurisdiction in contravention of applicable law.
This announcement is not an offer of securities for sale in or into the United States or any jurisdiction in which such an offer or solicitation is unlawful. Any securities issued in connection with the Acquisition have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act") and may not be offered, sold, taken up or renounced in the United States absent registration under the US Securities Act or an applicable exemption from such registration.
Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company's current expectations, estimates and projections about its industry, its beliefs and assumptions. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond the Company's control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. These factors include, amongst others, the ability to consummate the transaction; the ability of Autonomy to successfully integrate Verity's operations and employees; the ability to realise anticipated synergies and cost savings; technology risks, including dependence on core technology; fluctuations in quarterly results; dependence on new product development; rapid technological and market change; reliance on sales by others; management of growth; dependence on key personnel; rapid expansion; growth of the internet; financial risk management; and future growth subject to risks. The Company cautions Shareholders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.
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