Telelogic announces agreement to acquire Continuus - leading challenger in configuration management software

Agreement to Acquire Continuus Further Strengthens Telelogic's Position as leading Supplier of Solutions for Real-time Software Development

Telelogic announced today that it has entered into a definitive merger agreement with Continuus (NASDAQ: CNSW), to acquire all of the outstanding shares of Continuus at a cash price of $3.46 per share. The transaction has a total value of approximately $42 million. The directors of both companies have approved the merger agreement. Shareholders representing 36% of the outstanding shares, on a fully diluted basis, have irrevocably committed to tender their shares in the tender offer.

Continuus, headquartered in Irvine, California is a leading supplier of configuration management software to the telecom industry and other real-time segments like aerospace, automotive and defense. Its customers include companies like Nokia, Lucent, BT, BMW, Raytheon and Lockheed Martin. In 1999, Continuus had revenues of $37.3 million.

"This is an important next step in our ambition to create a fully integrated state-of-the-art development environment. We are creating this by combining the best-of-breed products covering the full software development process." said Anders Lidbeck, President and CEO at Telelogic. "Continuus also has a strong market presence in the US, a very good understanding of our market and a solid technical background. These are all key for us in our ambition to be the partner of choice for companies and engineers developing advanced system and software."

"Strategically, this acquisition will give our configuration management solution the sales channels, marketing focus and critical mass we need." said John Wark, President and CEO at Continuus. "Telelogic has a leading brand, the products and the global network. The combined entities will create an even stronger organization that will benefit both our employees and customers."

Under the merger agreement, Telelogic will commence a tender offer for Continuus's outstanding shares, which will be subject to certain conditions, including at least 51% majority of Continuus's outstanding shares, on a fully diluted basis, being tendered without withdrawal prior to the expiration of the offer, and clearance of the transaction under applicable antitrust laws and other governmental agencies' regulations being obtained.

Strengthened market position
Continuus is a leading supplier of configuration management tools to the telecom industry and other real-time segments like aerospace, automotive and defense. Continuus' customer base include companies like Nokia, Lucent, NEC, BMW, Raytheon and Lockheed Martin.

With the acquisition of QSS in August this year, Telelogic opened up new opportunities in other segments for advanced software development than real-time. Continuus' solutions have successfully been used in a variety of advanced system development projects, including major wins in the business applications market. As a result, the acquisition provides a strengthened position within these new segments as well.

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