Symphony Technology Group announces a recommended cash offer of SEK 1.75 per share in IBS AB

Symphony Technology Group announces a recommended cash offer of SEK 1.75
per share in IBS AB

Symphony Technology Group via Sweden Acquisition Corp. (“STG”) hereby
announces a recommended offer to the shareholders in IBS AB (“IBS” or
the “Company”) to acquire all the shares in IBS for SEK 1.75 in cash per
share, regardless of share class (the “Offer”). The IBS class B shares
are listed on NASDAQ OMX First North (“First North”).

Summary of the Offer

  · STG offers SEK 1.75 in cash for each share in IBS, regardless of
share class.[1]

  · Irrevocable undertaking. Deccan Value Advisors Fund L.P., A/D Value
Fund L.P., Y/D Value Fund L.P. and DVA Master Fund Ltd. (hereinafter
jointly referred to as “Deccan”), holding 4,650,000 shares of class A
and 89,194,205 shares of class B, representing approximately 75.5
percent of the capital and approximately 81.4 percent of the votes of
the Company, have irrevocably undertaken to accept the Offer. [2]

  · Recommendation from the IBS Board. The Board of Directors of IBS has
unanimously decided to recommend IBS' shareholders to accept the
Offer.[3] The IBS Board has obtained a fairness opinion from an
independent expert.

  · Acceptance period. The acceptance period is expected to commence on
May 30, 2011 and end on June 28, 2011.

“Symphony Technology Group believes that the IBS group would strongly
benefit from a change in ownership as well as a partner who can provide
capital and competence to invest in strengthening the Company's
operations and value to customers. Symphony Technology Group has a long
history in working with enterprise software companies such as IBS
successfully, and we are optimistic that we can be good partners for the
Company”, says J.T. Treadwell, Managing Director at Symphony Technology
Group.

Background to and rationale for the Offer

IBS is a leader in the development of ERP business software solutions
for logistics and distribution companies. IBS had revenue of MSEK 1,300
in 2010 and delivers solutions to over 1,300 customers globally.  

Symphony Technology Group is a strategic private equity firm with the
mission of investing in and building great software and services
companies. In addition to capital, Symphony Technology Group provides
transformation expertise to enable its companies to deliver maximum
value to their customers, to drive growth through innovation, to retain
and attract the best talent and to achieve best in class business
performance. Symphony Technology Group has made multiple successful
investments into the enterprise software solutions market, including
Intentia AB, Industri-Matematik, Escalate Retail, and Aldata.  Symphony
Technology Group's portfolio consists of 12 global companies. 

The acquisition of IBS will enhance IBS' ability to invest in its
solutions for customers, and provide IBS access to capital as well as a
long term strategic partner that has a deep understanding of delivering
ERP software solutions on long term profitable basis. The combination is
anticipated to provide IBS with enhanced reach to deliver solutions
around the world. 

STG recognizes the deep domain experience of the IBS team, and the rich
functionality of the solutions that IBS deliver to their customers. STG
respects these capabilities and intends to protect, invest in and grow
IBS' business and solutions.

STG places great value on the capabilities, skills, and knowledge of the
IBS employees, and considers them fundamental to the success of STG's
investment in IBS going forward.  STG does not expect any major near
term changes for IBS employees or its global locations, however, given
the profitability challenges of IBS, STG will evaluate options on an
ongoing basis to ensure that IBS can be a sustainably profitable company
in order to be the best partner for its global customers.  

The Offer

STG is offering SEK 1.75 in cash for each share in IBS, regardless of
share class.[4] No commission will be charged in connection with the
Offer. The total value of the Offer amounts to approximately SEK 217.5
million, based on 124,270,574 outstanding shares, of which 4,725,000 are
of class A and 119,545,574 are of class B.[5]  

The Offer is formally made through Sweden Acquisition Corp., a Delaware
corporation, which is wholly owned by Symphony Technology Group funds
STG III, L.P. and STG III-A, L.P., both being Delaware limited
partnerships.[6] Sweden Acquisition Corp. may be substituted as
acquisition vehicle by another entity wholly owned, directly or
indirectly, by STG III, L.P. and STG III-A, L.P., in which case Sweden
Acquisition Corp. and such other entity shall be jointly and severally
liable in all respects in relation to the Offer. 

The Offer price is below the closing price of IBS' class B share of SEK
1.90 on May 16, 2011 (i.e. the last trading day before announcement of
the Offer) as well as the average closing price of IBS' class B share on
First North for the last ten trading days before announcement of the
Offer of SEK 2.54.

Dr. Pallab Chatterjee was chairman of the Board of Directors of IBS
until October 2010. Dr. Pallab Chatterjee is currently Managing Director
and Operating Partner at Symphony Technology Group, and participates in
the Offer. Accordingly, STG intends to comply with the rules set forth
in section IV of the Swedish Industry and Commerce Stock Exchange
Committee's (Sw. Näringslivets Börskommitté, NBK) rules concerning
public offers for the acquisition of shares traded on certain MTFs. Dr.
Pallab Chatterjee owns 50,000 shares of class B in IBS, none of which
have been acquired during the last six months prior to the announcement
of the Offer.

Financing of the Offer

The Offer is not contingent on receipt of any financing. Symphony
Technology Group funds STG III, L.P. and STG III-A, L.P., both being
Delaware limited partnerships, have committed to finance Sweden
Acquisition Corp. with enough equity and/or shareholder loans to pursue
the Offer. Part of such amount may be substituted by external debt
financing.

STG's holding in IBS

Neither STG nor any of its affiliates owns or controls any shares in
IBS, nor have they acquired any shares in IBS during the last six months
prior to the announcement of the Offer.

Recommendation from IBS' Board of Directors

IBS' Board of Directors has on May 17, 2011 unanimously decided to
recommend IBS' shareholders to accept the Offer.[7] IBS' Board of
Directors has informed STG that it has obtained a fairness opinion
regarding the Offer from an independent expert.

Irrevocable undertaking to accept the Offer

Deccan, holding 4,650,000 shares of class A and 89,194,205 shares of
class B, representing approximately 75.5 percent of the capital and
approximately 81.4 percent of the votes of the Company, has irrevocably
undertaken to accept the Offer.[8]

Transaction Agreement

STG has entered into a transaction agreement with the Company regarding
the Offer, which will be disclosed in its entirety in the offer
document.

Conditions to completion of the Offer

Completion of the Offer is conditional upon:

 

(1)          the Offer being accepted to such an extent that STG becomes
the owner of more than 90 percent of the total number of shares in the
Company (calculated before as well as on a fully diluted basis)[9];

(2)          no other party announcing an offer to acquire IBS on terms
that are more favorable to the shareholders in IBS than the Offer;

(3)          with respect to the Offer and the acquisition of IBS,
receipt of all necessary regulatory, governmental or similar clearances,
approvals and decisions, including from competition authorities, in each
case on terms which, in STG's reasonable opinion, are acceptable in all
material respects;

(4)          the Offer not being wholly or partly prevented or
materially adversely affected by any legislation or other regulation,
court decision, public authority decision or similar circumstance, which
is actual or could reasonably be anticipated, outside the control of STG
and which STG could not reasonably have foreseen at the time of the
announcement of the Offer;

(5)          no information made public by IBS or disclosed by IBS to
STG being materially inaccurate, incomplete or misleading, and IBS not
having failed to make public any material information that should have
been made public by it;

(6)          there being no circumstances which could reasonably not
have been known, anticipated or foreseen by STG on the date hereof,
having occurred after the date hereof that have a material adverse
effect upon the business, results of operations or financial condition
of IBS and its subsidiaries taken as a whole; provided, however, that
none of (A) any economic, business, political, social or legal
conditions generally or any conditions of any financial, banking or
securities markets (including but not limited to any acts of war,
terrorism or natural disasters), (B) any events or conditions that
generally affect the industry in which the Company operates, (C) any
change or development in law, regulation or generally accepted
accounting principles or (D) the identity of STG, except, in the case of
each of clauses (A), (B) and (C), to the extent having a
disproportionate effect on the Company relative to the Company's
competitors, shall be considered in determining whether such a material
adverse effect has occurred; and

(7)          IBS not taking any measures that typically are intended to
impair the prerequisites for the implementation of the Offer.

STG reserves the right to withdraw the Offer in the event that it is
clear that any of the above conditions is not fulfilled or cannot be
fulfilled. However, with regard to conditions (2) - (7), such withdrawal
will only be made provided that the non-fulfillment of such condition is
of material importance to STG's acquisition of IBS.

STG reserves the right to waive, in whole or in part, any or all of the
conditions above, including, with respect to condition (1) above, to
complete the Offer at a lower level of acceptance.

Description of Symphony Technology Group

Symphony Technology Group is a strategic private equity firm with the
mission of investing in and building great software and services
companies. In addition to capital, Symphony Technology Group provides
transformation expertise to enable its companies to deliver maximum
value to their clients, to drive growth through innovation, to retain
and attract the best talent and to achieve best in class business
performance. Symphony Technology Group's current portfolio consists of
12 global companies. Symphony Technology Group has over USD 1 billion of
managed capital. For more information, visit:
www.symphonytg.com (http://www.symphonytg.com/). Sweden Acquisition
Corp. is a Delaware corporation owned by Symphony Technology Group funds
STG III, L.P. and STG III-A, L.P., both being Delaware limited
partnerships.

Preliminary timetable

  · The offer document is expected to be made public on May 27, 2011.

  · The acceptance period is expected to commence on May 30, 2011 and
end on June 28, 2011.

  · Settlement is expected to take place as soon as possible following
the end of the acceptance period.

STG reserves the right to extend the acceptance period, as well as to
postpone the settlement.

Compulsory acquisition and de-listing

As soon as possible following STG's acquisition of shares representing
more than 90 percent of the shares in IBS, STG intends to initiate
compulsory acquisition of the outstanding minority shares in IBS. In
connection herewith, STG intends to act in favor of a de-listing of the
IBS class B shares from First North.

Applicable laws and rules

The Swedish Industry and Commerce Stock Exchange Committee's (Sw.
Näringslivets Börskommitté, NBK) rules concerning public offers for the
acquisition of shares traded on certain MTFs, and the Swedish Securities
Council's (Sw. Aktiemarknadsnämnden) rulings regarding interpretation
and implementation thereof, shall apply to the Offer.

The Offer shall be governed by and construed in accordance with
substantive Swedish law. Disputes relating to the Offer shall be subject
to the exclusive jurisdiction of the Swedish courts, of which the
Stockholm City Court shall be the court of first instance.

Additional information:

For additional information about the Offer, please visit
www.symphonytg.com or contact J.T. Treadwell, Managing Director at STG,
on +1 650-935-9529.

The information was submitted for publication at 7.30 a.m. CET on May
17, 2011.

 

[1] The offered price is subject to adjustment should IBS pay any
dividend or make any other value distribution to shareholders prior to
the settlement of the Offer, and will accordingly be reduced by the
amount of any such dividend or value distribution per share.

[2] 2,303,800 treasury shares of class B have been excluded from the
calculation.

[3] Due to the undertaking by Deccan to accept the Offer, Vinit Bodas
has not participated in the IBS Board of Directors' evaluation of the
Offer.

[4] The offered price is subject to adjustment should IBS pay any
dividend or make any other value distribution to shareholders prior to
the settlement of the Offer, and will accordingly be reduced by the
amount of any such dividend or value distribution per share.

[5] Excluding 2,303,800 treasury shares of class B.

[6] The company's address is c/o Symphony Technology Group, 2475 Hanover
Street, Palo Alto, CA 94304. The company has not carried out any
business activities prior to the Offer.

[7] Due to the undertaking by Deccan to accept the Offer, Vinit Bodas
has not participated in the board of directors' of IBS evaluation of the
Offer.  

[8] 2,303,800 treasury shares of class B have been excluded from the
calculation.

[9] Treasury shares and warrants held by IBS or its subsidiaries shall
be excluded from the calculation.