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Onyx Software Proposes to Acquire Pivotal Corporation at 26% Premium to Existing Offer Proposal Has a Value of US$2.25 per Pivotal Share

  • 14 November, 2003 12:00

<p>Onyx Software Proposes to Acquire Pivotal Corporation at 26% Premium to Existing Offer
Proposal Has a Value of US$2.25 per Pivotal Share</p>
<p>Sydney - 13th November 2003 -- Onyx® Software Corp. (NASDAQ: ONXS), a worldwide leader in successful CRM, today announced an unsolicited proposal to acquire Pivotal Corporation (NASDAQ: PVTL and TSE:PVT) by way of a business combination in a stock for stock transaction valued at approximately US$2.25 per Pivotal common share. Under the terms of the proposal which was submitted by letter to the Pivotal Board of Directors this morning and is included with this press release, the companies will be combined on the basis of 0.475 shares of Onyx Software common stock for each common share of Pivotal Corporation, or approximately 12.5 million shares of Onyx. The approximate price per Pivotal share of US$2.25 is based on the US$4.73 closing price of Onyx common stock on November 11, 2003.</p>
<p>On October 8, 2003 Pivotal announced that it had entered into a definitive agreement to be acquired by Talisma Corporation in a cash transaction financed by Oak Investment Partners valued at US$1.78 per share. The Talisma transaction is still pending and is scheduled for a shareholder vote on November 18, 2003. The Onyx proposal represents a 26% premium over the Talisma offer. The Onyx proposal is structured to provide potential tax deferral benefits to investors compared to the existing offer. Onyx has not at this time commenced an exchange offer for Pivotal shares.</p>
<p>“We believe that Onyx is best positioned to deliver value from the Pivotal franchise and that the proposed combination will increase our leadership in mid-market CRM and accelerate our profitable growth. If we are correct, this value will directly benefit Pivotal’s shareholders and provide upsides above and beyond the existing cash offer from Talisma,” said Brent Frei, Onyx Software CEO. Onyx has already achieved Leader placement in Gartner’s Magic Quadrant report on CRM Suites for North America Midsize Businesses (MSB),* and was recently named the #1 mid-market CRM vendor by CRM Magazine(US edition).</p>
<p>“Onyx and Pivotal both understand customers’ desire for much more than the limited functionality of low-end solutions and their fear of costly-to-implement, humungous software. We share a legacy of development on the Microsoft platform. We both sell broadly to a variety of industries, yet we also each have dedicated efforts focused on specific verticals,” Frei said.</p>
<p>“Beyond these commonalities, the combined entity will have a more comprehensive geographic presence and complementary selling efforts,” said Brian Henry, Onyx Software Executive Vice President and CFO. “Onyx tends to sell to the mid-market and above, while Pivotal tends to sell to the mid-market and below.” Upon closing, Onyx Software would be the second largest pure-play CRM vendor with more than 2600 customers and an annual revenue run rate of more than US$110 million. Onyx expects that the synergies of the two companies will make the proposed transaction significantly accretive to shareholders, excluding transaction and restructuring costs, which include a US$1,500,000 breakup fee associated with the pending Talisma transaction. Onyx anticipates the accretive benefits could potentially begin as early as the first or second full fiscal quarter after completion of the transaction.</p>
<p>“Onyx is recognised for our ability to develop and nurture strong relationships with brand-name organisations, resulting in successful CRM deployments that lead to additional license and services business,” Frei said. “If we are successful in completing this transaction we intend to apply this proven customer engagement model to help Pivotal’s customers further experience CRM success while driving additional revenue. Additionally, the Pivotal partner channel represents an opportunity for our highly-successful Embedded CRM offering.”</p>
<p>“Onyx has a strong operational model that has generated cash from operations, delivered non-GAAP profitability and achieved sequential license revenue growth in recent quarters. We believe that Pivotal’s board of directors will see that the proposed business combination is a great fit for Pivotal’s shareholders, customers, and employees,” Frei said.</p>
<p>Onyx Software Special Conference Call
Onyx Software hosted a conference call to discuss its proposed business combination with Pivotal Corporation, archives are available for replay at the following URLs: www.onyx.com or www.companyboardroom.com.</p>
<p>Replay: +1-617-801-6888 (available through Tuesday, November 18, 11:59 pm)
Passcode: 19764759</p>
<p>About Onyx Software
Onyx Software Corp. (Nasdaq: ONXS), a worldwide leader in delivering successful CRM, offers a fast, cost-effective, usable solution that shares critical information among employees, customers and partners through three role-specific, Web services-based portals. The Onyx approach delivers real-world success by aligning CRM technology with business objectives, strategies and processes. Companies rely on Onyx across multiple departments to create a superior customer experience and a profitable bottom line. Onyx serves customers worldwide in a variety of industries, including financial services, healthcare, high technology and the public sector. Customers include Amway, United Kingdom lottery operator Camelot, Delta Dental Plans of California, Microsoft Corporation, Mellon Financial Corporation, The Regence Group, State Street Corporation and Suncorp. More information can be found at (888) ASK-ONYX, info@onyx.com or http://www.onyx.com.</p>
<p>* The Magic Quadrant is copyrighted April 2003, by Gartner, Inc. and is reused with permission. Gartner's permission to print or reference its Magic Quadrant should not be deemed to be an endorsement of any company or product depicted in the quadrant. The Magic Quadrant is Gartner's opinion and is an analytical representation of a marketplace at and for a specific time period. It measures vendors against Gartner-defined criteria for a marketplace. The positioning of vendors within a Magic Quadrant is based on the complex interplay of many factors. Gartner does not advise enterprises to select only those firms in the Leaders segment. In some situations, firms in the Visionary, Challenger, or Niche Player segments may be the right match for an enterprise's requirements. Well-informed vendor selection decisions should rely on more than a Magic Quadrant. Gartner research is intended to be one of many information sources and the reader should not rely solely on the Magic Quadrant for decision-making. Gartner expressly disclaims all warranties, express or implied of fitness of this research for a particular purpose.</p>
<p>This press release and the documents included herein are neither an offer to purchase nor a solicitation of an offer to sell securities. Any offer will be made only through an exchange offer statement or proxy statement/prospectus. Investors and security holders are strongly advised to read such document regarding the proposed offer referred to in this press release, if and when such document is filed and becomes available, because it will contain important information. Any such exchange offer statement or proxy statement/prospectus would be filed by Onyx with the U.S. Securities and Exchange Commission (SEC). Investors and security holders may obtain a free copy of the exchange offer statement or proxy statement/prospectus (if and when filed and available) and other relevant documents on the SEC's web site at: www.sec.gov. Any such exchange offer statement or proxy statement/prospectus and related materials may also be obtained for free by directing such requests to Onyx at 425-451-8060.</p>
<p>Forward-Looking Statement
This press release contains forward-looking statements, including statements about the likelihood that the Pivotal Board of Directors will accept the Onyx proposal, the anticipated economic performance of Onyx and Pivotal as a combined company, the impact of the proposed transaction on shareholders of Onyx and Pivotal, and the ability of Onyx to continue to sell products into the existing Pivotal customer base. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could affect Onyx's actual results include, but are not limited to the risk that the Pivotal Board of Directors elects not to accept the Onyx proposal, the risk that Onyx and Pivotal are unable to reach a definitive agreement, the risk that even if such a definitive agreement is reached that the resulting business combination will not realise the anticipated economic benefits, the risk that Onyx common stock declines or otherwise underperforms over time, the risk that the attention of Onyx’s management is diverted from the operation of its core business, and the "Important Factors That May Affect Our Business, Our Results of Operations and Our Stock Price" described in our quarterly report on form 10-Q for the period ended June 30, 2003. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Onyx undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.</p>
<p>For further information, please contact:</p>
<p>Carrie Holmes
Onyx Software
+ 1 (425) 519-4096 (office)
carrieh@onyx.com</p>
<p>or</p>
<p>Roger Marshall/Will McIntyre
Spectrum Communications
Tel: +61 2 9954 3299
Email: rogerm@spectrumcomms.com.au/willm@spectrumcomms.com.au</p>

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