LOGICA ANNOUNCES ACQUISITION OF TEAM 121 London, 24 June 1999PR NEWSWIRE: This press release is transmitted on behalf of Logica. Acquisition of Team 121, a leading UK provider of SAP based solutions for the industry and utilities sectors, for £74.5 million comprising a combination of new Logica ordinary shares and cash. In addition, Logica has committed a further£13.8 million in new Logica ordinary shares for certain key senior managers of Team 121 This acquisition is expected to be earnings enhancing, before goodwill amortisation, across both the first and second halves of Logicas next financial year starting 1 July 1999 Fully underwritten placing of 18.4 million new ordinary Logica shares for cash to raise £113.7 million (net of expenses) to finance the £15 million cash element of the acquisition of Team 121 and to refinance debt incurred from five recent acquisitions which together totalled £86.5 million. The placing is not conditional on completion of the acquisition of Team 121 Logicas trading performance continues to be very positive and the company is confident of an excellent outcome for the year ending 30 June 1999. This performance reflects strong growth, both organically and from acquisitions, particularly in the telecoms market. The outlook for the next six months is strong and the Board of Logica looks forward with confidence to a further year of superior growthMartin Read, Logica plcs managing director and chief executive said, "This acquisitionstrengthens the all-embracing service Logica offers its clients. It greatly enhances our ERPcapability, a key tool to support growth in the energy and utilities, industry and
LOGICA ANNOUNCES ACQUISITION OF TEAM 121 London, 24 June 1999telecommunications sectors. It will also allow us to enter the business process outsourcingmarket for SAP applications. I believe that this move will create new opportunities for Logicaand will further enhance our position as the global solutions company."Iain Barker, Team 121s chief executive officer highlighted, "This is an exciting time for Team121s staff and clients. By joining with Logica we will create a powerful new force in themarket and extend the scope and range of activities available to our staff. I believe that thiswill mark a significant new stage in Logicas growth."Logica announces its offer to acquire Team 121, one of the UKs market leaders in SAPimplementation primarily focused on the industry and utilities sectors. The considerationwill be a combination of new Logica ordinary shares and up to £14 million cash. Theacquisition is expected to be earnings enhancing, before goodwill amortisation, across boththe first and second halves of Logicas next financial year starting 1 July 1999.Team 121 is a leading independent provider of SAP based solutions. Founded in 1990 by itschairman and managing director Iain Barker, Team 121 currently employs over 400 peopleacross its offices in the UK and Norway. The company has also started to win significantbusiness in other European markets.Team 121s key activities include SAP consulting and implementation across all areas of ERPfor both large organisations and small to medium sized enterprises.Team 121s audited financial record for the past four years is as follows:£million 1996 1997 1998* 1999*Year ended 30 AprilTurnover 5.0 9.6 16.7 36.2EBIT 0.5 1.1 2.3 3.6***Numbers stated post 1998 group reorganisation**Before £0.4 million of sale related costsAt 30 April 1999, Team 121s net assets were £3.1 million.Team 121 will be integrated with Logicas UK business and will be the heart of a new centreof excellence in SAP implementation skills across Europe. This is an important step for Logicaas it provides the company with a strong concentration of SAP skills and customers, withclients such as Chubb, Invensys and most recently Yorkshire Water which announced a £5million SAP contract last week. Team 121 is accredited with the SAP logo partnershipprogramme.The acquisition will strengthen Logicas portfolio of skills to support its current growth areas.It also puts the company in a strong position to benefit from the next wave in ERP growthstimulated by such developments as web enablement and e-commerce connectivity for
LOGICA ANNOUNCES ACQUISITION OF TEAM 121 London, 24 June 1999existing SAP users. These advances further enhance Logicas overall capabilities in customerrelationship management solutions.Logicas existing capabilities in e-commerce, customer relationship management, datawarehousing and customer care and billing will be further supported and enhanced by thisacquisition. It is expected that the acquisition will give the company an opportunity tosignificantly enhance its ERP capabilities in UK and Europe. The acquisition will also enableLogica to become a major player in the business process outsourcing market for SAPapplications.All of the key management team of Team 121, including Iain Barker, are entering into newservice agreements with Logica.OFFER STRUCTUREAlthough Team 121 is a private company, in view of the number of shareholders, themajority being Team 121 employees, the acquisition is being made by way of a formalrecommended takeover offer. Shareholders in Team 121 are being offered 12.554 newordinary shares in Logica for every Team 121 share (the "Offer"), valuing Team 121 at £73.4million based on Logicas middle market quotation at the close of business on 23 June 1999.Logica will also pay Team 121 shareholders costs totalling £1.1 million. Team 121shareholders may elect to receive up to £14.0 million cash in lieu of Logica shares.Shareholders representing over 90 per cent of Team 121s fully diluted share capital haveirrevocably undertaken to accept the Offer and have elected for the partial cash election infull. Full acceptance of the partial cash election will result in the issue of a maximum of 9.2million new Logica shares. It is expected that the Offer will become wholly unconditional on28 June 1999.Dealing restrictions will apply for up to one year to the new Logica shares to be issued toTeam 121 shareholders under the Offer. Further, in relation to 4.0 million new Logica sharesto be issued in connection with the acquisition of Iain Barkers registered holding in Team121, half will be locked up for one year and half for two years.The issue of 0.9 million new Logica shares under the Offer will be deferred for two yearssubject to any claims arising under the representations, warranties and indemnities given toLogica by certain shareholders in connection with the business of Team 121.A further 1.9 million new Logica shares, currently valued at £12.5 million, will be issued inequal annual tranches over the next three years to Iain Barker in consideration for himcomplying with the terms of a deed of restrictive covenant and continuing to be employedby Logica during each of the three years. Logica is also providing new incentivearrangements for senior management of Team 121.SHARE PLACINGLogica also intends to raise approximately £113.7 million, net of expenses, by way of aplacing for cash of 18.4 million new ordinary shares representing approximately 5.0 per cent
LOGICA ANNOUNCES ACQUISITION OF TEAM 121 London, 24 June 1999of its current issued share capital. The new shares will rank paripassu with the existingissued ordinary shares of Logica. Warburg Dillon Read and Close Brothers have underwrittenthe placing, and Warburg Dillon Read is broker to the placing.The net proceeds of the placing will be used to finance the £15 million cash component ofthe proposed acquisition of Team 121 and to refinance debt incurred from five recentacquisitions which together totalled £86.5 million. The placing is not conditional oncompletion of the acquisition of Team 121.NOTE TO EDITORS:ERP (enterprise resource planning) is the umbrella term for packaged integrated businesssystems. The market for client/server ERP packages has experienced rapid growth and thesepackages are now used in most of the world’s largest companies. SAP AG is currentlyestimated to have around 30 per cent of the global ERP market.Founded in 1969, Logica plc is a leading international computer consultancy, systemsintegration and software company. Logicas clients operate across diverse markets includingfinance, telecommunications, energy and utilities, industry, government, defence, transportand space. Logica has over 8,000 staff in 23 countries worldwide.This announcement is published on behalf of Logica and Team 121, is the sole responsibilityof Logica (except in relation to information relating solely to Team 121, its directors andpersons connected with them) and Team 121 (in relation to information relating solely toTeam 121, its directors and persons connected with them) and has been approved byWarburg Dillon Read and Close Brothers Corporate Finance Limited solely for the purposesof section 57 of the Financial Services Act 1986.Close Brothers Corporate Finance Limited, which is regulated in the UK by The Securities andFutures Authority Limited, is acting for Logica and no one else in connection with the Offerand the share placing and will not be responsible to anyone other than Logica for providingthe protections afforded to customers of Close Brothers, nor for providing advice in relationto the Offer and the share placing.Warburg Dillon Read, the investment banking division of UBS AG, which is regulated in theUK by The Securities and Futures Authority Limited, is acting for Logica and no one else inconnection with the share placing and will not be responsible to anyone other than Logicafor providing the protections afforded to customers of Warburg Dillon Read, nor forproviding advice in relation to the share placing.The shares of the Company are not being registered under the US Securities Act of 1933, asamended (the Securities Act) and may not be offered or sold in the United States or to or forthe account or benefit of US persons (as such terms are defined in Regulation S under theSecurities Act) except pursuant to an exemption from such registrationThis announcement does not constitute an offer or an invitation to purchase any securities.
LOGICA ANNOUNCES ACQUISITION OF TEAM 121 London, 24 June 1999Copies of this announcement are not being, and must not be, mailed or otherwisedistributed or sent in or into the United States, Canada or Japan and persons receiving thisannouncement (including custodians, nominees and trustees) must not distribute or send itinto or from the United States, Canada or Japan.