-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L2208MBxGdT9hwoq5qYVnirvaBsBKYBl3LU1Hnind2qStN2d/UNwsY7pJugxDYb1 NHvBUX5sF/x9Qcn8lEH8ew== 0000356028-00-000004.txt : 20000216 0000356028-00-000004.hdr.sgml : 20000216 ACCESSION NUMBER: 0000356028-00-000004 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20000214 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: STERLING SOFTWARE INC CENTRAL INDEX KEY: 0000716714 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 751873956 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 425 SEC ACT: SEC FILE NUMBER: 001-08465 FILM NUMBER: 544254 BUSINESS ADDRESS: STREET 1: 300 CRESCENT COURT STREET 2: SUITE 1200 CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 2149811000 MAIL ADDRESS: STREET 1: 300 CRESCENT COURT STREET 2: SUITE 1200 CITY: DALLAS STATE: TX ZIP: 75201 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: COMPUTER ASSOCIATES INTERNATIONAL INC CENTRAL INDEX KEY: 0000356028 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 132857434 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: ONE COMPUTER ASSOCIATES PLAZA CITY: ISLANDIA STATE: NY ZIP: 11788 BUSINESS PHONE: 5163425224 425 1 Filed by Computer Associates International, Inc. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14d-2 of the Securities Exchange Act of 1934 Subject Company: Sterling Software, Inc. Commission File No. 001-08465 Filed by Computer Associates International, Inc. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14d-2 of the Securities Exchange Act of 1934 Contacts: Bob Gordon, CA public relations Doug Robinson, CA investor relations (631) 342-2391 (631) 342-2745 bobg@ca.com dougr@ca.com Cindy Foor, Sterling public relations Julie Kupp, Sterling investor relations (214) 981-1000 (214) 981-1000 cindy.foor@sterling.com julie.kupp@sterling.com COMPUTER ASSOCIATES TO ACQUIRE STERLING SOFTWARE $4 Billion Stock Transaction to Continue to Fuel CA's Surge In eBusiness Software and Services Largest Acquisition in History of Software Industry Expected to be EBITDA Accretive Leading Supplier of Storage and Network Management, EAI, Portals and Application Development ISLANDIA, NY and DALLAS, TX, February 14, 2000 - Computer Associates International, Inc. (NYSE: CA) today announced an agreement to acquire Sterling Software, Inc. (NYSE: SSW), extending its arsenal of software and services to build, deploy, manage and secure eBusiness solutions. The $4 billion stock-for-stock acquisition, which would be the largest ever in the history of the software industry, has been approved unanimously by the Boards of Directors of both Sterling Software and CA. The acquisition is expected to be accretive to CA's earnings per share, excluding any one-time research and development charge and amortization of acquisition intangibles, and is subject to certain closing conditions, including regulatory approvals. The acquisition will be accounted for using the purchase method. Under terms of the agreement, a subsidiary of CA will commence an offer to exchange 0.5634 shares of CA stock for each outstanding Sterling share. The exchange ratio is subject to a collar. If the average trading price of CA stock for the designated period prior to the closing of the offer is greater than $77.12, the exchange ratio will be reduced so that each Sterling share tendered in the offer would be exchanged for $43.45 worth of CA stock. If the average trading price of CA shares for the period is less than $63.10, the exchange ratio will be increased so that each Sterling share tendered in the offer would be exchanged for $35.55 worth of CA stock. In this case, CA may elect to reduce the exchange ratio and make up the difference in cash and or stock. The tender offer will be followed by a back-end merger on the same terms of those in the offer. The offer will be subject to customary closing conditions, including that at least a majority of Sterling's outstanding shares has been tendered and antitrust clearance obtained. The parties expect the transaction will be one of the first to take advantage of the SEC's new "fast track" exchange offer rules designed to expedite stock-for-stock transactions. Sterling Software solutions are deployed at more than 20,000 customer sites worldwide--including 90 percent of Fortune 100 companies--to create, control, automate and manage both traditional and eBusiness systems. Sterling Software's award-winning portal technology provides access to data stored in corporate databases, in the same way that Internet content portals provide access to the wealth of content on the Web. The anticipated acquisition will expand CA's broad array of products and services, while accelerating their delivery. This will enable all companies -- from the newest "dot coms" to established brick-and-mortar businesses - to continue to exploit the latest opportunities driven by the Internet economy. CA plans to enhance Sterling Software products with its industry-leading technology, including information visualization, Neugents neural network technology and infrastructure management solutions, providing clients with the world's most powerful and complete environment for end-to-end eBusiness. In particular, the combination of Sterling Software's COOL suite and CA's Jasmine ii information infrastructure will deliver the most sophisticated and personalized enterprise application integration solution on the market. "The merger of Sterling Software and CA brings together two outstanding organizations that share common values, and have compatible strategies and track records of achievement," said Charles B. Wang, CA chairman and CEO. "We look forward to providing an even broader range of eBusiness solutions to clients, greater opportunities for employees, and accelerated near and long-term return for shareholders." "This merger will be extremely beneficial to our clients and employees," said Sterling L. Williams, president and chief executive officer of Sterling Software. "We have a deep appreciation for CA's commitment to quality, innovation and customer service, all in a corporate culture that is incredibly complementary to ours. Together, we'll be able to offer the best products and services for clients of both companies, as well as new and exciting career paths for employees." The merger will create the industry's largest supplier of storage management technology, with solutions that cover the entire enterprise from OS/390 and distributed systems to desktops and even laptops. These will include the industry's leading distributed backup and recovery products, as well as Storage Area Network solutions unprecedented in their breadth and scope. Customers from both companies will also benefit from increased delivery of Sterling Software solutions through CA's extensive global sales organization, including both direct and indirect channels. "We are extremely focused on being the leading provider in storage and network management, business intelligence and portal solutions, and in the design, deployment and integration of enterprise applications," said Sanjay Kumar, CA president and COO. "CA's business, built on a combination of world-class technology and high value-added consulting services, will immediately benefit from complementary technology and services from Sterling Software. The combined company will be able to exploit the incredible opportunities of the Internet era by continuing to deliver superior value for our clients." Sterling Software clients and partners will be invited to attend CA-World, CA's annual user conference from April 9-14 in New Orleans, in place of the Sterling Software Worldwide Customer Conference. CA also intends to publish papers on product development strategies and directions shortly after completion of the acquisition. Founded in 1981, Sterling Software reported $807 million in revenues in fiscal 1999. The company has recorded 45 consecutive quarters of revenue and earnings per share growth. CA was advised on this transaction by the law firm of Covington & Burling and by the investment banking firm of Morgan Stanley Dean Witter. Advisors for Sterling Software were the law firm of Skadden, Arps, Slate, Meagher & Flom LLP and the investment banking firms of Goldman Sachs and Co. and Broadview International LLC. Sterling Software is a leading provider of software and services for the application development, business intelligence, information management, storage management, network management, VM systems management, and federal systems markets. The company is one of the 20 largest independent software companies in the world. Headquartered in Dallas, Sterling Software has a worldwide installed base of more than 20,000 customer sites and 3,800 employees in 90 offices worldwide. For more information on Sterling Software, visit the company's Web site at www.sterling.com. Computer Associates International, Inc. (NYSE: CA), the world's leading business software company, delivers the end-to-end infrastructure to enable eBusiness through innovative technology, services and education. CA has 18,000 employees worldwide and had revenue of $6.3 billion for the year ended December 31, 1999. For more information, visit www.ca.com. ### All referenced product names are trademarks of their respective companies. Statements in this release concerning the Company's future prospects are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. There can be no assurances that future results will be achieved, and actual results could differ materially from forecasts and estimates. Important factors that could cause actual results to differ materially include: the significant percentage of CA's and Sterling Software's quarterly sales consummated in the last few days of the quarter making financial predictions especially difficult and raising a substantial risk of variance in actual results; the risks of potential litigation arising from the Year 2000 date change for computer programs; the emergence of new competitive initiatives resulting from rapid technological advances or changes in pricing in the market; the risks associated with new product introductions as well as the uncertainty of customer acceptance of these new or enhanced products from either CA, Sterling or their competition; risks associated with the entry into new markets such as professional services; the risks associated with integrating newly acquired businesses and technologies; increasing dependency on large dollar licensing transactions; delays in product delivery; reliance on mainframe capacity growth; the ability to recruit and retain qualified personnel; business conditions in the client/server and mainframe software and hardware markets; uncertainty and volatility associated with Internet and eBusiness related activities; use of software patent rights to attempt to limit competition; fluctuations in foreign currency exchange rates and interest rates; the volatility of the international marketplace; and other risks described in filings with the Securities and Exchange Commission. --- We urge investors and security holders to read the following documents, when they become available, regarding the exchange offer and the merger (described above), because they will contain important information: - - Computer Associates' preliminary prospectus, prospectus supplements, final prospectus, and tender offer material. - - Computer Associates' Registration Statement on Form S-4 and Schedule TO containing or incorporating by reference such documents and other information. - - Sterling Software's Solicitation/Recommendation Statement on Schedule 14D-9. These documents and amendments to these documents will be filed with the United States Securities and Exchange Commission. When these and other documents are filed with the SEC, they may be obtained free at the SEC's web site at www.sec.gov. You may also obtain for free each of these documents (when available) from Computer Associates by directing your request to Investor Relations at www.ca.com/invest/questions or by fax at 631-342-6864, or from Sterling Software by directing your request to investor@sterling.com or by fax at (214) 981-1215. EX-99 2 (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo Computer Associates To Acquire Sterling Software Fuels CA's eBusiness Surge February 14, 2000 (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo CA/ Sterling Combination - - $4 Billion stock purchase transaction - - Fixed exchange ratio of 0.5634 shares of CA for each SSW share inside collar - - Collar is plus or minus 10% of $70.11 (10 day average of average high / low for CA) - - Fixed value for each SSW share outside collar (variable exchange ratio) - - Maximum value is $43.45 per SSW share - - Minimum value is $35.55 per SSW share - - CA has option to contribute cash or stock for the difference between actual SSW share price and the minimum collar amount value (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo CA/ Sterling Combination - - Extends CA's eBusiness offerings: - - Cutting edge eBusiness intelligence tools - - Leader in enterprise application development tools - - High end storage management - - OS/390 network management - - Expands CA's US Federal business (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo eBusiness Intelligence - - Eureka product family provides a complete range of business intelligence solutions for eBusiness and B2B information exchange (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo eBusiness Intelligence - - Eureka:Portal - - Simple, intuitive access to business intelligence - - Provides personalized web services - - Synergistic with CA's existing EAI infrastructure solutions (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo eBusiness Intelligence Powerful eBusiness solution with combinationa of CAs proven infrastructure and Neugent technology. (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo Application Development - - Sterling leader in Enterprise Application Development - - more than 5,000 customers - - more than 500 ISV's - - COOL:BIZ, GEN, PLEX, JOE solutions promote "e-volution" (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo Application Development - - eBusiness fueling new breed of applications - - Customers expect every transaction to be digital and instant - - COOL:Joe - 100% Java environment for enterprise Internet applications - - Leverage - - Jasmine Internet infrastructure - - CA services - - Deliver - - Personalized web experience - - EAI (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo OS/390 Market - - Re-emerging as eBusiness server - - Internet driving exponentially increased transactions - - CA enables OS/390 as an open systems eBusiness platform (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo Storage Management - - Internet and eBusiness driving unprecedented demand for storage - - Sterling's storage business fastest growth in market Source: Sterling Software (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo Storage Management Areas Platforms: OS/390 Distributed Disk Mgt SSW CA Off-line Media (tape & optical) CA CA Sterling's SAMS product family completes CA's market leading storage management offering (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo Storage Management Areas Replication CA High Availability CA Mobile Storage Mgt SSW Storage Event Mgt CA File Differencing SSW True end-to-end storage to enable eBusiness (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo Storage Management Areas SAN solutions: SAN mgt CA High speed backup CA Server-less backup SSW Heterogeneous file sharing SSW (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo Network Management - - SOLVE:Netmaster - - Only solution for OS/390 and TCP/IP - - Manages both sides of the Net - - Complements CA's leading network management solutions for distributed platforms (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo US Federal Business (Image) - - 1,170 services professionals - - Key contract areas: - - Intelligence - - Air traffic (FAA investing $15 billion) - - Secure communications - - Weather systems - - Studies and analyses - - Command and control - - Simulation training (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo US Federal Business - - Synergistic benefits - - Expands CA's existing Federal business - - Opportunity to leverage CA's broad technology offering - - End-to-End security - eTrust - - Business and data modeling tools - - Visualization (Image) (Computer Associates International, Inc.) Logo (Sterling Software, Inc.) Logo Computer Associates ...enabling eBusiness -----END PRIVACY-ENHANCED MESSAGE-----