SDL plc Proposed Acquisition of TRADOS
Sunnyvale, CA – The Board of SDL announced today proposals to acquire for a maximum aggregate consideration of $60.0 million (£33.0 million), certain intellectual property in TRADOS and all of the outstanding issued shares of TRADOS. This includes $7.8 million (£4.3 million) for intellectual property, $52.2 million (£28.7 million) for the outstanding shares in TRADOS which include a $7.8 million (£4.3 million) TRADOS Management Incentive Plan. The above transactions will be satisfied by a cash consideration of $50 million (£27.5 million) to be funded from new bank facilities of £20 million and the balance from the existing cash resources of the Company and by the issue of Ordinary Shares in SDL with a value of up to $10.0 million (£5.5 million).
TRADOS Incorporated, a Delaware corporation, provides translation software that enables global businesses to operate more efficiently in foreign markets by automating key processes associated with the authoring, localization and publishing of enterprise information.
TRADOS products are used in over 3,500 enterprises, and it enjoys a significant market share of the translation memory solutions market. TRADOS products and services are tailored to meet the application and infrastructure software needs of three distinct market segments: (i) global enterprises; (ii) localization service providers; and (iii) freelance translator professionals.
The acquisition is conditional, inter alia, upon the approval of SDL Shareholders at an Extraordinary General Meeting to be convened for this purpose.
SDL plc is today holding an analyst presentation in relation to the proposed acquisition. If you would like to attend, please contact Financial Dynamics at the number given below.
Background to and Reasons for the Acquisition
* Proliferation of global operations and rapid convergence of data to digital format, create a real need for a cost effective, multilingual information management system on a global scale
* By combining the technology, R&D, customer relationships, and sales and marketing capabilities, the Enlarged Group will offer a stronger and more competitive offering in the Global Information Management (“GIM”) market with the breadth and scale that the market demands
* The Board believes the acquisition to be in the best interests of our Customers, Shareholders and Staff for the following reasons
--TRADOS is a leading provider of translation software products. It has a wide customer base, excellent Enterprise and Desktop Sales and marketing infrastructure, proprietary technology and is well regarded in the translation industry;
* The Acquisition represents the opportunity to strengthen SDL’s position in the translation software sector through the integration of SDL’s technology and TRADOS’s product, market and technical knowledge;
--The Acquisition represents the opportunity to accelerate the development of the next generation of translation software based on open industry standards by bringing together TRADOS’s and SDL’s products and development teams and leveraging the ability of the Enlarged Group to invest in translation software and services;
--The Acquisition represents the opportunity to provide expanded functionality and enhanced features for TRADOS’s current customer base;
--The Acquisition will give SDL further access to the international market through TRADOS’s distribution network, therefore giving SDL the opportunity to cross sell its business process outsourcing solution; and
--The Enlarged Group will be the first company to provide truly extensive end to end technology and service solutions for managing global information assets on a global enterprise level, providing full geographical production coverage integrated with enterprise software.
* The Directors believe that the Enlarged Group will have an increased market presence and the Enlarged Group will be better placed to serve the GIM market.
* Following the Completion of the acquisition, Joseph S. Campbell, President and CEO of TRADOS Inc will be joining the board of SDL as a Non-Executive Director.
* The Directors of SDL unanimously recommend the acquisition to the SDL Shareholders
Mark Lancaster, Chief Executive Officer of SDL plc, said: “The Board believes that the acquisition will increase SDL’s long-term growth and profitability, offer an attractive product offering and give SDL the critical mass to compete more effectively in the Global Information Management market. SDL has significant resources and infrastructure to implement its vision of the expansion of the GIM market. TRADOS has a considerable installed base of technology solutions and both companies have leading technology. The success of both TRADOS and SDL in selling technology through an understanding of where it fits and how to sell it gives me great confidence in our future as a combined entity.”
Joseph Campbell, President and Chief Executive Officer of TRADOS Inc., commented, “This is a wonderful opportunity for the Enlarged Group to take full advantage of the growth opportunities in software, services and solutions for the global information management market.”
All dollar amounts have been converted into sterling at the rate of $1.82 to the pound, the exchange rate on 17th June 2005, being the latest practically available data prior to the issue of this announcement.
For further information, visit www.sdl.com or contact Fiona Camden with SDL at +44 (0)1628 410 120, or contact Edward Bridges or Juliet Clarke with Financial Dynamics at +44 (0)20 7831 3113.