1
FILED BY SEMA GROUP PLC
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
AND DEEMED FILED PURSUANT TO RULE 14a-12
OF THE SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: LHS GROUP INC.
COMMISSION FILE NO. 000-22409
FOR IMMEDIATE RELEASE 15 MARCH 2000
SEMA GROUP PLC
MERGER WITH LHS GROUP INC.
SEMA TO BECOME A WORLD LEADER IN MOBILE COMMUNICATIONS SOFTWARE
LONDON and ATLANTA - Sema Group plc ("Sema", London: SEM.L) and LHS Group Inc.
("LHS", NASDAQ: LHSG.O, Neuer Markt: LHI.DE), two of the world's leading
telecommunications software and services providers, today announce that they
have agreed to join forces, creating a global powerhouse in mobile
communications software. The enlarged group will be listed in London, Paris and
on NASDAQ.
SUMMARY OF THE MERGER
- - Merger of Sema and LHS to create a world leader in mobile communications
software
- - LHS, based in Atlanta, is a leading global provider of billing and
operations support systems software with offices worldwide including
Frankfurt, Kuala Lumpur, Sao Paolo, Boston, Miami and Zurich
- - LHS shareholders to receive 2.6 new Sema ordinary shares for each LHS
share, representing a current value for each LHS share of $69.7
- - Merger terms currently value LHS at $4.7 billion (on a fully diluted
basis)
- - LHS shareholders to hold some 27 per cent. of the combined group (on a
fully diluted basis)
- - Expected to be accretive to Sema earnings immediately, before taking into
account the benefits of any synergies and the amortisation of goodwill
- - In addition, the combination is expected to generate substantial
opportunities for revenue enhancement within the next two to three years
RATIONALE
- - Combination of SemaVision, Targys and the enlarged group's other software
products and services to provide its customer base with one of the
strongest and most extensive offerings of business and operational
solutions for the mobile communications industry
- - Broader geographical coverage, increased technical depth, expanded
resource pool and opportunity to leverage combined installed customer base
- - Strong position to capitalise on the expected growth of mobile commerce
products and services
- - Further cross-selling opportunities expected from systems integration,
outsourcing and messaging expertise
- - Pooling of technical expertise to aggressively drive technology leadership
- - Increased market share key to success for technology based company
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Pierre Bonelli, Chief Executive of Sema, said, "We are delighted to have
reached agreement with LHS on the terms of a merger. The combination will
assist us in achieving our stated telecoms strategy of becoming the worldwide
leader in customer care and billing, prepaid, messaging, value-added services
and mobile commerce. The ultimate prize for a technology company is market
share".
Gary Cuccio, Chief Executive of LHS, said, "The combination of LHS and Sema
will create a global telecom software and services powerhouse. The company will
also be extremely well positioned to capitalise on the wireless internet market
by leveraging its global customer base. We look forward to working together to
exploit the excellent opportunities which this merger will create for our
customers, stockholders and employees".
Shareholders representing approximately 30 per cent. of LHS's share capital,
including Mr. Hartmut Lademacher, chairman and one of the founders of LHS, and
General Atlantic Partners, have undertaken to vote in favour of the merger. In
addition, LHS has granted Sema an option to subscribe for new shares in LHS
representing up to 17.5 per cent. of the existing capital of LHS. The exercise
price per share will be the value of 2.6 shares of Sema at the time of exercise
of the option.
Mr. Lademacher and Mr. George Schmitt, currently directors of LHS, will join
the board of Sema on closing.
Details of briefings for analysts, investors and the media will be circulated
in due course. Further information on each company can be found on their
websites at www.semagroup.com and www.lhsgroup.com
SEMA GROUP PLC
Pierre Bonelli +44 207 830 4444
William Bitan +33 1 40 92 40 92
Marie-Claude Bessis
DEUTSCHE BANK
London
Jeremy Lucas +44 207 545 8000
Rory Johnston
Boston
Jerry Coughlan +1 617 737 8181
SHANDWICK
Bobby Leach +44 207 329 0096
Sarah Pascoe
GAVIN ANDERSON
Scott Tagliarino +1 212 515 1900
LHS GROUP INC. +1 770 280 3100
Gary Cuccio
Peter Chambers
Rainer Westermann
GOLDMAN SACHS & CO. +1 212 902 1000
Gene Sykes
Gregg Lemkau
All currency conversions between pounds sterling and US dollars have been made
at a rate of $1.58 : Pound Sterling1. Please note that Sema's financials are
reported under UK GAAP and LHS's financials are quoted under US GAAP
3
Deutsche Bank AG London ("Deutsche Bank"), which is regulated in the United
Kingdom by The Securities and Futures Authority Limited, is acting for Sema in
connection with the merger and for no one else and will not be responsible to
anyone other than Sema for providing the protections afforded to customers of
Deutsche Bank or for providing advice in relation to the merger.
FOR IMMEDIATE RELEASE 15 MARCH 2000
SEMA GROUP PLC
MERGER WITH LHS GROUP INC.
SEMA TO BECOME A WORLD LEADER IN MOBILE COMMUNICATIONS SOFTWARE
1. INTRODUCTION
LONDON and ATLANTA - Today, Sema and LHS announce that they have entered into a
definitive agreement for the merger of LHS with Sema. The telecoms business of
Sema will thereby be combined with LHS to create one of the world's leading
suppliers of mobile communications software. The enlarged group will provide
its customers with one of the strongest and most extensive offerings of
business and operational solutions in the communications industry.
Under the terms of the merger, LHS shareholders will be entitled to receive 2.6
new Sema ordinary shares for each LHS common share held at closing. Such new
Sema shares will be delivered in the form of Sema ordinary shares, or Sema
American Depositary Shares ("ADSs") which will be registered with the SEC and
traded on Nasdaq National Market ("NASDAQ"). The merger terms currently
represent a value of $69.7 per LHS share and value LHS at $4.7 billion (on a
fully diluted basis). Following the merger, existing Sema shareholders will own
some 73 per cent. of the combined company and LHS shareholders will own some 27
per cent. (on a fully diluted basis).
Sema expects that the transaction will be immediately accretive to earnings per
share, excluding goodwill amortisation and before taking account of synergies.
In addition Sema expects the combination to generate significant opportunities
for revenue enhancement within the next two to three years.
Sema's shares will continue to be listed on the London Stock Exchange and the
Paris Bourse. Sema will also apply for the new shares to be issued to LHS
shareholders in connection with the merger to be listed on the London Stock
Exchange and the Paris Bourse and for the ADSs to be listed on NASDAQ.
Sema and LHS intend to publish detailed information on the merger for
shareholders in approximately two months. Subject to shareholder approval and
regulatory consents, closing of the merger is expected to occur early in the
second half of 2000.
Sema is being advised by Deutsche Bank. LHS is being advised by Goldman, Sachs
& Co. HSBC is acting as broker to Sema.
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2. BACKGROUND TO AND REASONS FOR THE MERGER
Sema's stated telecoms strategy is to become the worldwide leader in customer
care and billing, prepaid, messaging, value added services and mobile commerce.
LHS, as one of the premier organisations in the field of operations support
systems, with an extensive worldwide installed customer base, was identified by
Sema as an ideal partner for furthering this strategy.
3. BENEFITS OF THE MERGER
The combination of Sema's telecoms business with LHS will establish one of the
largest suppliers of customer care, billing, messaging and pre-paid solutions
to the telecommunications industry worldwide. The enlarged operation will have,
in the mobile telecoms sector, more than:
2,600 employees
- - 350 customer sites worldwide
140 million subscribers
$400 million of revenues
In addition, LHS will strengthen the enlarged Sema Group by broadening the
scope of the services offered and expanding the depth of technical support.
Sema will also benefit from broader geographical coverage and the optimisation
of the two companies' research and development efforts.
LHS's position as a products based business will increase Sema's exposure to
the dynamic telecommunications software sector and thereby enhance its margins.
Sema also anticipates that significant opportunities will arise from offering
its systems integration, outsourcing and messaging expertise to existing LHS
customers. In addition, Sema will look to build on LHS's long experience and
excellent working relationships with its partners in the fields of systems
integration, telecommunications equipment manufacturing and service delivery.
In the internet space, the combination of Sema's recently launched SemaPortal
and both Sema's and LHS's support of wireless data (GPRS), IP and WAP services
will provide the enlarged group with comprehensive coverage. Allied to this,
Sema will be able to market its already established e-commerce business to
LHS's existing customer base.
4. PROPOSED DIRECTORS OF SEMA
On closing of the merger, Mr. Hartmut Lademacher, chairman and one of the
founders of LHS, and Mr. George Schmitt, a director of LHS, will join the board
of Sema as non-executive directors.
5. STRUCTURE OF THE TRANSACTION
The merger will be effected in accordance with the terms of an agreement and
plan of merger dated 14 March 2000 (the "Merger Agreement"). Under the terms of
the Merger Agreement, each LHS share will be exchanged for 2.6 new Sema
ordinary shares which may be delivered in the form of ADSs or Sema ordinary
shares.
Under the terms of the Merger Agreement, three of the major shareholders of
LHS, including Mr. Lademacher, will retain their holdings in LHS. Sema will
have full authority to manage the business of LHS.
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6. MERGER AGREEMENT
The Merger Agreement sets out the conditions to the closing of the merger. It
also contains certain termination rights, mutual representations and warranties
and various covenants relating to the operation of the businesses of Sema and
LHS in the period until closing.
The Merger Agreement requires Sema and LHS to effect the merger unless any one
of the conditions to the implementation of the merger is not satisfied or
waived by 30 September 2000. The Merger Agreement also provides for limited
termination rights and termination fees to be paid by LHS to Sema in certain
circumstances.
Principal conditions
The conditions to the implementation of the merger include necessary Sema and
LHS shareholder approvals, the admission of the new Sema ordinary shares to
listing by the London Stock Exchange, the SEC registration statement in respect
of the Sema ADSs having become effective, receipt of certain regulatory
approvals and the absence of any court or governmental order prohibiting the
merger.
Termination rights
Either party has the right to terminate the Merger Agreement if:
either LHS or Sema shareholders do not approve the merger and related
transactions; there is a material breach of representation, covenant or
warranty by the other party; or any of the other conditions to completion
are not fulfilled.
Termination payments
The parties have agreed that LHS will make a payment to Sema of $105 million in
the following circumstances:
the directors of LHS withdraw their recommendation of the merger and
notify LHS's shareholders of an alternative transaction which LHS's
directors believe would be more beneficial to them and the LHS
shareholders do not approve the merger; or Sema terminates the Merger
Agreement because of a breach by LHS and within six months LHS agrees to a
transaction which will result in a change of control of it.
7. VOTING COMMITMENTS AND OPTION AGREEMENT
General Atlantic Partners, a major shareholder of LHS, has undertaken to vote
in favour of the merger. The three shareholders who will be retaining their
holdings in LHS have given equivalent commitments. These commitments represent
approximately 30 per cent. of the share capital of LHS.
LHS has granted Sema an option exercisable up to the date of completion of the
merger, to subscribe for new shares in LHS representing up to 17.5 per cent. of
the existing capital of LHS. The exercise price per share will be the value of
2.6 shares of Sema at the time of exercise of the option. After exercise of the
option, Sema would have the ability to vote approximately 40 per cent. of the
share capital of LHS in favour of the merger.
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8. ACCOUNTING AND REPORTING IMPLICATIONS
It is intended that Sema will continue to have a December year end. The
accounts of the group will be published in pounds sterling and will be prepared
in accordance with UK GAAP, with a reconciliation to US GAAP.
9. INFORMATION ON SEMA
Sema is an information technology services company which provides its customers
with the design, provision, implementation, operation and management of
information systems and IT-related consulting services. Sema's customers
include a wide variety of businesses and government departments located in over
70 countries around the world. Sema is a FTSE 100 company, quoted on the London
Stock Exchange and the Paris Bourse. It currently has a market capitalisation
of Pound Sterling7.9 billion. In 1999, the group's turnover reached Pound
Sterling1.41 billion ($2.23 billion), an increase of 20 per cent. on continuing
activities over 1998. Profit before tax and goodwill amortisation was Pound
Sterling95.9 million ($151.5 million) and net assets as at 31 December 1999
were Pound Sterling239.7 million ($378.7 million). Over the past five years,
adjusted earnings per share, based on continuing activities and before goodwill
amortisation, has seen a compound annual growth rate of 30 per cent.
In terms of revenue, Sema currently ranks as the second largest European-listed
IT services company. Sema has its registered office in London, United Kingdom
and has a substantial portion of its management and operations in Paris, France
as well as other countries throughout the world. The company has approximately
20,200 employees in 25 countries. Sema's primary geographic markets are in
Western Europe, where it derived 88 per cent. of its total revenues in 1999.
Providing systems integration (44.0 per cent. of turnover), outsourcing (44.7
per cent. of turnover) and products (11.3 per cent. of turnover), Sema works
across the main sectors of the economy focusing on key growth areas - such as
telecoms, mobile and electronic commerce and financial services. Sema's
customers generally require complex and highly flexible information technology
systems to run their business efficiently and maintain competitive advantage.
Sema delivers projects and services which are driven by its clients' strategic
goals and make a major impact on their business success. Approximately 20 per
cent. of turnover in 1999 was derived from each of the finance and public
sectors. The telecommunications sector accounted for approximately 16 per cent.
of turnover in the same period.
10. INFORMATION ON LHS
LHS Group is a leading global provider of billing and operations support system
software and services to the communications industry. LHS products range from
pre- and post paid billing and customer care to enhanced services and
acquisition software. They are installed at more than 300 customer sites
worldwide. LHS has 18 global and regional partners (system integrators,
international operators and equipment manufacturers) representing one of the
largest implementation and support networks in the global customer care and
billing market.
In addition to its Atlanta headquarters, LHS has major offices in Frankfurt,
Germany; Kuala Lumpur, Malaysia; Sao Paulo, Brazil; Boston, USA; Miami, USA;
and Zurich, Switzerland.
In the year ended 31 December 1999, LHS reported profits before tax of $61.6
million (Pound Sterling39.0 million) on turnover of $262.6 million (Pound
Sterling166.2 million). Net assets as at 31 December 1999 were $208.0 million
(Pound Sterling131.7 million).
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In 1999, licence revenues accounted for 41.4 per cent. of turnover (1998 - 40.5
per cent.) and services revenues 58.6 per cent. (1998 - 59.5 per cent.).
11. PRO FORMA SUMMARISED PROFIT AND LOSS ACCOUNT AND NET ASSETS
(i) Pounds sterling
YEAR ENDED 31 DECEMBER 1999 SEMA LHS PRO-FORMA COMBINED
----------------- ----------------- ------------------
POUND STERLING(m) POUND STERLING(m) POUND STERLING(m)
Sales 1,1410.0 166.2 1,576.2
EBITDA 152.9 42.0 194.9
Operating profit 97.1 35.9 133.0
Profit before tax 95.9 39.0 134.9
Net assets (as at 31 December 1999) 239.7 131.7 371.4
(ii) US dollars
PRO-FORMA
SEMA LHS COMBINED
--------------- --------------- ---------------
YEAR ENDED 31 DECEMBER 1999 $m $m $m
Sales 2,227.8 262.6 2,490.4
EBITDA 241.6 66.4 308.0
Operating profit 153.4 56.8 210.2
Profit before tax 151.5 61.6 213.1
Net assets (as at 31 December 1999) 378.7 208.0 586.7
NOTES TO THE PRO FORMA FINANCIAL INFORMATION
No account has been taken of the impact of acquisition accounting on the
combined operating profit.
Financial information in respect of Sema has been extracted from the preliminary
announcement of results for the year ended 31 December 1999. Operating profit
and profit before tax have been stated before goodwill amortisation.
Financial information in respect of LHS has been extracted from the preliminary
results announcement for the year ended 31 December 1999.
No adjustments have been made to restate LHS's accounting policies to be
consistent with those of Sema.
EBITDA equals earnings before interest, taxation, depreciation and amortisation.
12. SOURCES AND BASES
LHS fully diluted shares based on 58.8 million shares and 8.1 million options
in issue. Sema fully diluted shares based on 463.5 million shares and 11.5
million options in issue. Sema closing middle market price of Pound
Sterling16.96 on 14 March 2000.
Values throughout this announcement have been translated between US dollars and
Sterling (for illustration purposes only) using an exchange rate of $1.58 :
Pound Sterling1.
The merger described in this announcement, in which LHS's shareholders would
receive shares or ADSs in Sema, requires shareholder approval of Sema and LHS
and the solicitation of such approval has not yet commenced. This announcement
is neither an offer to purchase nor the solicitation of an offer to sell any
securities. The offer of shares or ADSs in Sema, as merger
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consideration, to LHS's shareholders will be made only through a prospectus and
proxy statement which will be sent to those shareholders.
Statements in this press announcement regarding Sema's and LHS's businesses
which are not historical facts, including the potential benefits and synergies
of the merger, are "forward-looking statements" that involve risks and
uncertainties. These risks and uncertainties include the abilities of Sema and
LHS to consummate the merger and realise the benefits and synergies outlined.
IN CONNECTION WITH THE MERGER, SEMA WILL FILE A REGISTRATION STATEMENT WITH THE
U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") WHICH WILL INCLUDE A PROSPECTUS
AND PROXY STATEMENT. OTHER MATERIALS RELATING TO THE MERGER WILL ALSO BE FILED
WITH THE SEC. INVESTORS ARE URGED TO READ THE PROSPECTUS AND PROXY STATEMENT
AND OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC BECAUSE THEY WILL INCLUDE
IMPORTANT INFORMATION.
MATERIALS FILED WITH THE SEC WILL BE AVAILABLE ELECTRONICALLY, WITHOUT CHARGE,
AT AN INTERNET SITE MAINTAINED BY THE SEC. THE ADDRESS OF THAT SITE IS
HTTP:/WWW.SEC.GOV. IN ADDITION, THE PROSPECTUS AND PROXY STATEMENT FILED WITH
THE SEC WILL BE MAILED TO LHS SHAREHOLDERS AND MAY BE OBTAINED WITHOUT CHARGE
FROM SEMA OR LHS UPON REQUEST. DOCUMENTS FILED WITH THE SEC WITH RESPECT TO THE
MERGER MAY BE OBTAINED WITHOUT CHARGE FROM SEMA'S HEAD OFFICE AT 233 HIGH
HOLBORN, LONDON WC1V 7DJ.
UNLESS SEMA OTHERWISE DETERMINES, THE PROSPECTUS AND PROXY STATEMENT WILL NOT
BE SENT, DIRECTLY OR INDIRECTLY, IN OR INTO, OR BY THE USE OF THE MAILS OR ANY
MEANS OR INSTRUMENTALITY (INCLUDING WITHOUT LIMITATION, TELEPHONICALLY OR
ELECTRONICALLY) OF INTERSTATE OR FOREIGN COMMERCE, OR FACILITIES OF A NATIONAL,
STATE OR OTHER SECURITIES EXCHANGE OF CANADA, AUSTRALIA OR JAPAN AND INVESTORS
IN CANADA, AUSTRALIA OR JAPAN WILL NOT BE CAPABLE OF VOTING WITH RESPECT TO
APPROVING THE MERGER BY ANY SUCH USE, MEANS, INSTRUMENTALITY OR FACILITY AND
THIS ANNOUNCEMENT MAY NOT BE DISTRIBUTED IN ANY SUCH JURISDICTIONS.
Sema is being advised by Deutsche Bank and Clifford Chance Rogers & Wells in
this transaction. LHS is being advised by Goldman, Sachs & Co. and Alston &
Bird LLP.
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The ultimate prize in technology is market share
[SEMA GROUP LOGO]
MERGER WITH LHS
Creates the number one provider in mobile communications software
1
10
Leader in mobile communications software...
Sema/LHS mobile activity will have more than:
- 2,600 employees (December 1999)
- 350 customer sites worldwide
- 140 million subscribers
- $400 million revenues
One of the strongest and most extensive offerings of business and operatinal
solutions for customers in the communications industry
2 [SEMA GROUP LOGO]
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STRATEGIC RATIONALE
Sema Priorities = Sema Strengths + LHS Strengths
- Increased market share - More than 15 M CCBS - More than 45 M CCBS
for CCBS in mobile telecoms subscribers subscribers
- ------------------------------------------------------------------------------------------------------------------
- The right CCBS for the new - SemaVision - Targys
new economy - Prepaid - 45 M - Prepaid - 15 M subscribers
subscribers
- ------------------------------------------------------------------------------------------------------------------
- Capitalise on market dynamics - Proven solutions for GPRS, UMTS and Churn
- ------------------------------------------------------------------------------------------------------------------
- Develop new solutions in the - Proven solutions for
internet market place Messaging - more than 40 M
subscribers
- Existing common capability in mobile commerce WAP
- ------------------------------------------------------------------------------------------------------------------
- Increase channels of distribution - Start partner programme - Established partner programme
- ------------------------------------------------------------------------------------------------------------------
- Expand product revenue - Proven systems integrator - Product driven business model
and leverageable customer
base
3
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POST MERGER PRODUCT STRATEGY
- LHS and the Sema Telecom SBU will be merged into ONE SINGLE SBU
- First Priority: specify the road map based on the CONVERGENT STRATEGY
of SemaVision and Targys
- The COMMON OBJECT ORIENTED ARCHITECTURE used to develop the two
products, with particular reference to the high flexibility and
scalability of SemaVision, allows convergence
- INTEGRATION OF LHS IS FUNDAMENTAL TO SEMA'S STRATEGY OF CREATING AN
EXPANDED PRODUCT FAMILY TO MEET ALL THE NEEDS OF A RAPIDLY DEVELOPING
MARKET PLACE
4 [SEMA GROUP LOGO]
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PORTFOLIO OF COMBINED ENTITY
(E-COMMERCE) (GPRS/WIRELESS DATA) (ENHANCED SERVICE) (SYSTEMS INTEGRATION)
(SMS) (DATA WAREHOUSING) (PREPAID) (CHURN MANAGEMENT)
(MESSAGING) (UNIFIED MESSAGING) (WAP) (OUTSOURCING)
(BUSINESS CONTINUITY) (CC&B) (CONSULTING) (E-BANKING)
5 [SEMA GROUP LOGO]
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SYNERGIES
- Offer SemaVision and the future vision to the Tier 1 replacement
market, including operators of Tier 1 calibre in LHS's installed
base
- Offer BSCS /Targys as the solution for the Tier 2/3 upgrade market
- Offer systems integration solutions, where needed, to the combined
installed base
- Extend LHS's partner relationship strategy to SemaVision
- Offer the group's complete portfolio through an expanded sales force
- Leverage the combined leadership for the North American market
- Enhance quality of R & D effort
6 [SEMA GROUP LOGO]
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MARKET MIX - TOTAL GROUP
Sema
Defence 3%
Energy 7%
Services 7%
Industry 13%
Transport 14%
TELECOMS 16%
Public Sector 20%
Finance 20%
Combined Sema/LHS
Transport 12%
Industry 12%
Energy 6%
Services 6%
Defence 3%
TELECOMS 25%
Public Sector 18%
Finance 18%
7 [SEMA GROUP LOGO]
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GEOGRAPHIC MIX -- TOTAL GROUP
Sema
ROW 36%
Americas 5%
Asia 4%
France 24%
UK 31%
LHS
ROW 43%
Asia 11%
France 2%
Americas 44%
Combined Sema/LHS
ROW 37%
Americas 9%
Asia 5%
France 21%
UK 28%
8 [SEMA GROUP LOGO]
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ACTIVITY MIX - TOTAL GROUP
Sema
Outsourcing 45%
Products 11%
Systems integration 44%
Combined Sema/LHS
Outsourcing 40%
Products 21%
Systems integration 39%
9 [SEMA GROUP LOGO]
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HEADLINE TERMS
- Purchasse price
- 2.6 Sema shares or ADSs per LHS share
- $69.7 per LHS share
- $4.7 billion fully diluted equity value
- Cash in business of $136 million
- Voting commitments and option secured for approximately 40% of LHS's
shares
- EPS accretive from day one before goodwill and synergies
- Substantial opportunities for revenue enhancement
- LHS shareholders will own some 27% of the enlarged group
- The enlarged Sema Group will have listings in London, Paris and on
NASDAQ
10 [SEMA GROUP LOGO]
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KEY FINANCIALS (POUND STERLING)
YEAR TO 31 DEC SEMA POUND STERLING LHS POUND STERLING PRO-FORMA COMBINED
1999 MILLIONS % T/O MILLIONS % T/O POUND STERLING % T/O
- -------------------------------------------------------------------------------------------------------------
Turnover 1,410.0 166.2 1,576.2
- -------------------------------------------------------------------------------------------------------------
EBITDA 152.9 10.8 42.0 25.3 194.9 12.4
- -------------------------------------------------------------------------------------------------------------
Operating profit 97.1 6.9 35.9 21.6 133.0 8.4
- -------------------------------------------------------------------------------------------------------------
Interest (1.2) 3.0 1.8
- -------------------------------------------------------------------------------------------------------------
PBT 95.9 6.8 39.0 23.5 134.9 8.6
- -------------------------------------------------------------------------------------------------------------
PAT 71.1 5.0 24.3 14.6 95.4 6.1
- -------------------------------------------------------------------------------------------------------------
Notes:
Sema: 1999 results announcement and analysts' presentation dated 17 February
2000
LHS: 1999 results announcement dated 22 February 2000. Unadjusted for
one-off merger charges of $4.3 million LHS converted to sterling at
exchange rate of $1.58 = Pound Sterling 1
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KEY FINANCIALS (US$)
YEAR TO 31 DEC SEMA LHS PRO-FORMA COMBINED
1999 $ MILLIONS % T/O $ MILLIONS % T/O $ MILLIONS % T/O
- -----------------------------------------------------------------------------------------------------
Turnover 2,227.8 262.6 2,490.4
- -----------------------------------------------------------------------------------------------------
EBITDA 241.6 10.8 66.4 25.3 308.0 12.4
- -----------------------------------------------------------------------------------------------------
Operating profit 153.4 6.9 56.8 21.6 210.2 8.4
- -----------------------------------------------------------------------------------------------------
Interest (1.9) 4.8 2.9
- -----------------------------------------------------------------------------------------------------
PBT 151.5 6.8 61.6 23.5 213.1 8.6
- -----------------------------------------------------------------------------------------------------
PAT 112.3 5.0 38.4 14.6 150.7 6.1
- -----------------------------------------------------------------------------------------------------
Notes:
Sema: 1999 results announcement and analysts' presentation dated
17 February 2000
LHS: 1999 results announcement dated 22 February 2000. Unadjusted for one-off
merger charges of $4.3 million LHS converted to dollars at exchange rate
of $1.58 = Pound Sterling 1
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OUTLINE ACQUISITION PROCESS
- Proxy merger offer to LHS's shareholders
- Documents anticipated to be posted during May
- Shareholder votes of Sema and LHS expected at end of June
- Completion and listing of Sema ADSs early in H2 2000
13 [SEMA GROUP LOGO]
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SUMMARY
- Creation of the number one provider in mobile communications software
- Immediately earnings accretive
- Substantial opportunities for revenue enhancement
- Major step in the achievement of Sema's published corporate plan
- The ultimate prize for technology is market share
14 [SEMA GROUP LOGO]
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A NEW GLOBAL FORCE
THE ULTIMATE PRIZE IN TECHNOLOGY IS MARKET SHARE
1999 Telecom revenues ($ million)
Sema LHS $600
Amdocs $400-500
CSC $300-400
Logica $300-400
Sema $300-400
AMS $300-400
CGS $300-400
LHS $200-300
CMG $100-200
Source : selected company websites and results announcements.
Figures relate to telecoms or CC&B revenue as quoted by each company.
LHS products contribute to the revenue of some of the above companies.
15 [SEMA GROUP LOGO]