Sopheon Announces Agreement to Acquire Alignent Software
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Transaction Will Broaden Company's Leadership as Provider of Strategic Business Solutions for Product Life Cycle Management and Accelerate Expansion into Aerospace, Defense and High-Tech Markets
MINNEAPOLIS and LONDON-June 11, 2007-Sopheon, the international software and services company, announced today that it has signed a definitive agreement to acquire Alignent Software Inc. The cash-based transaction is expected to be completed on or about June 18, 2007.
Based in California, Alignent is one of only a few suppliers worldwide that specializes in the provision of advanced product and technology roadmapping software for complex global companies. Alignent's flagship offering, Vision Strategist, is generally recognized as the leading application of its kind. The software has a proven track record of helping large organizations improve strategic innovation planning. Some of the foremost aerospace, defense and high-tech companies in the world, including Boeing, BAE Systems, Corning, Honeywell, Lockheed Martin, Motorola and NAVAIR have adopted Alignent's offering as their product planning solution.
Alignent's roadmapping software is an ideal complement to Sopheon's existing product innovation process and portfolio management system. Vision Strategist allows the user to visualize and predict how external market and technology trends will impact product plans over time, enabling better decisions on future product direction. A principal advantage of the software is that it improves cross-functional communication and collaboration throughout the planning process. Sopheon's Accolade ® software enhances the execution of product plans by
automating innovation process governance. Although the two applications will continue to be marketed separately, together they will constitute industry's first end-to-end strategic product planning software suite.
The acquisition of Alignent will immediately expand Sopheon's business in two areas. First, for the company's nearly 100 existing clients in chemical and consumer packaged goods markets, it will extend Sopheon's solution to include strategic product planning. Secondly, Alignent's roster of industry-leading customers will give Sopheon instant credibility in a range of new markets, accelerating its entry into aerospace, defense and high-tech.
Sopheon estimates that the acquisition will advance its product plans for Accolade by a full two years. It will also result in a substantial increase in the size of Sopheon's customer base. Initial feedback indicates that Sopheon can expect to achieve significant organic growth by selling its Accolade solution to existing Alignent clients challenged with improving innovation process governance. Sopheon expects to begin offering Accolade's product portfolio management capabilities to Alignent customers this summer.
"Our acquisition of Alignent represents significant strategic value to Sopheon," said Barry Mence, Sopheon's chairman. "It will help us deepen our penetration in the chemicals and consumer goods markets we currently target, while accelerating our expansion into new markets such as aerospace, defense and high-tech, which offer great upside growth potential. We expect substantial near- and long-term revenue benefits from the transaction, as well as enhanced earnings on an ongoing basis. This is a very positive move for our company, for our clients and for our shareholders."
"Sopheon has already established strong market position as the premier provider of software applications for governance of the innovation process," said Dennis Clerke, chief executive officer of Alignent. "The addition of Alignent's products, people and partners will enable Sopheon to deliver an unmatched set of strategic product planning and execution solutions to business and R&D decision makers. This is an exciting development that will yield significant benefits not only to Alignent's customers, but to global manufacturers in all sectors of industry."
Alignent reported revenues of $3 million and a $4.3 million net operating loss for 2006. Completion of the transaction is contingent upon the receipt of consents from Alignent shareholders and the delivery of ancillary agreements and formalities. Gross consideration for the acquisition amounts to $5.5 million, including $4.75 million initially upon closing and an additional $750 thousand in potential earn-out payments. Sopheon expects the Alignent business to make a positive EBITDA contribution from the first year following the purchase.
About Alignent Software
Alignent software company supports the powerful process of roadmapping. Alignent's solutions dynamically connect product and technology planning across the company, empowering organizations to visualize, manage and communicate future directions within a single system.
Alignent focuses R&D efforts, fosters cross-functional collaboration and aligns people around a unified plan of record that adapts in real-time to empower accurate, timely business decisions. The world's most sophisticated product and technology planners rely on Alignent, including BAE Systems, Corning, Honeywell, Lockheed Martin, Medtronic, Motorola, Philips, Textron, the U.S. Air Force and the U.S. Navy. For more information, please visit alignent.com
About Sopheon
Sopheon is an international provider of software and services that help organizations improve the business impact of product innovation. Sopheon's Accolade system automates and governs the innovation process, enabling companies to increase revenue and profits from new products. Sopheon is listed on the AIM Market of the London Stock Exchange and on the Euronext in the Netherlands. For more information, please visit www.sopheon.com
