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Will the enterprise market spend significant IT budget on Windows Vista in 2007?

Yes

No


Software M&A Insights
continued... page 2


TEKELEC (NASDAQ: TKLC) acquires Steleus Group
Category: Network Performance Management Software
Purchase Price: $56,000,000
Seller Revenue: $25,000,000
Revenue Multiple: 2.2x
Payment Terms: Stock,Cash

SEGís Perspective:
Tekelec, provider of telecommunications products for next-generation fixed, mobile, and packet networks, acquires Steleus Group, a real-time performance monitoring company that supplies network-related intelligence to telecom operators. After a two year strategic partnership, Steleus will now form the cornerstone of Tekelecís new Communications Software Solutions business unit. With almost 90% of its revenue coming from North America, Tekelec found Steleusí footprint outside of the U.S. (100 operators in 35 countries) particularly attractive. Aggressively seeking growth through acquisitions, Tekelec made two investments in network switching equipment makers by buying a 52% controlling interest in Santera ($28 million) and completing its acquisition of Taqua ($86 million) in April.

Cognos (NASDAQ: COGN) acquires Frango (Stockholm: FRAN B)
Category: Enterprise Performance Management
Purchase Price: $52,200,000
Seller Revenue: $34,300,000
Revenue Multiple: 1.5x
Payment Terms: Cash

SEGís Perspective:
Business intelligence powerhouse Cognos acquires Swedish business performance management (BPM) provider Frango, which specializes in consolidation and financial reporting products. With 60% of its sales coming from North America, Cognos sees Frango as an opportunity to quickly expand its European presence and compete with arch rival Business Objects on its home court. The purchase price represents a 63% premium over Frangoís closing price1 on the Stockholm Exchange. In December 2002 Cognos acquired Adaytum ($160 million), which is another BPM tool for budgeting and planning.

Open Solutions (NASDAQ: OPEN) acquires Datawest Solutions (TSX: DS)
Category: Banking, Financial Services Software
Purchase Price: $38,000,000
Seller Revenue: $34,300,000
Revenue Multiple: 1.1x
Payment Terms: Cash

SEGís Perspective:
Open Solutions, primarily a provider of software systems for small banks and credit unions, acquires Datawest Solutions, a provider of outsourced Internet and telephone banking systems, CRM applications and web-based loan origination software to Canadian credit unions. Open Solutions, a small public company which competes against billion dollar giants like Fiserv and Jack Henry, acquired Datawest to extend its presence in Canada. Seeking to rapidly grow its installed base and add an array of products capable of quickly generating incremental revenue, Open has spent $76.1 million on 5 acquisitions since its November 2003 IPO.

EV: Enterprise Value = equity purchase price, plus sellerís interest bearing debt, minus sellerís cash & cash equivalents



This report was prepared by Software Equity Group, L.L.C. (SEG), a mergers and acquisitions advisory firm serving the software, life science and technology sectors. SEG is solely responsible for its content. This material is based on data obtained from sources we deem to be reliable; it is not guaranteed as to its accuracy and does not purport to be complete. This information is not to be used as the primary basis of investment decisions. For more, please visit www.softwareequity.com, or phone (858) 509-2800.

     






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