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EXHIBIT 99.1
BMC SOFTWARE TO ACQUIRE BGS SYSTEMS
STRATEGIC ACQUISITION WOULD COMBINE LEADING TECHNOLOGIES TO PROVIDE
APPLICATION SERVICE ASSURANCE PRODUCTS
HOUSTON -- (Feb.2, 1998) -- BMC Software, Inc. (NASD: BMCS), a
leading developer and vendor of computer software solutions that improve the
availability, performance and recoverability of business-critical applications
and data, today announced the execution of a definitive merger agreement with
BGS Systems, Inc. (NASD: BGSS) of Waltham, MA. This strategic acquisition
combines BGS's industry-leading BEST/1(R) performance analysis and prediction
technology and products with BMC Software's suite of PATROL(R) application
management, data management and performance optimization solutions, providing
the industry's first application service assurance products.
BMC Software will pay the equivalent of $45 in BMC Software common
stock for each share of BGS common stock, using the average price per share of
BMC Software common stock during a ten day trading period preceding closing.
Total value of the transaction is approximately $285 million. The transaction
is to be accounted for as a pooling of interests and is to be treated as a
tax-free reorganization for federal income tax purposes. The transaction is
expected to close within 60 to 90 days, subject to BGS shareholder approval,
regulatory approval and other customary closing conditions.
"BGS has the best analytical and predictive tools for enterprise
information systems," said Max Watson, chairman, president and chief executive
officer of BMC Software. "They have delivered solid products for over twenty
years, know their market segment cold and have great people. We see a clear
customer requirement for correlating and interpreting the tremendous amount of
performance statistics and data that PATROL provides. BMC has a road-map for
providing these additional capabilities, and the BGS BEST/1 products fit
perfectly with our plans. We are very enthusiastic about the potential to
leverage PATROL's market momentum and product breadth with BGS's products,
people and capabilities."
Watson added that the similarities between BMC Software and BGS
Systems should simplify the integration of the companies and their
technologies. Both companies' have extensive expertise in developing high
value solutions for mainframe and open systems environments and share a direct
sales distribution model targeted at large enterprise systems.
MERGER STRENGTHENS PATROL'S LEADERSHIP AND EXPANDS ENTERPRISE PRODUCT LINES
BMC Software currently leads the market for monitoring and event
management software with its PATROL Management Suite, which provides the
broadest platform coverage with support for all of the leading operating
systems, database management systems and enterprise resource planning
applications. PATROL collects and delivers more performance metrics than any
comparable systems management tool and offers an unrivaled ability to collect
and display
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performance data from large and complex distributed information systems. With
this merger, BMC Software will acquire BGS's industry leading BEST/1
performance analysis and prediction products and integrate them with PATROL.
The combination of BEST/1's superior performance analysis and prediction
capabilities with PATROL should enable BMC Software to deliver pro-active
application service assurance products that have the predictive capability to
anticipate system events, such as an outage or throughput bottleneck, and take
corrective action well before the problem occurs. This capability would enable
internal information systems organizations to provide application service
assurance to their customers and reduce the administrative costs and complexity
associated with today's heterogeneous and distributed information systems.
In addition to its performance management solutions for UNIX and
Microsoft NT-based distributed systems, BGS provides a full line of performance
management products for mainframe systems. BMC Software believes its strong
presence and reputation as a mainframe systems management vendor should provide
for expanded growth opportunities for the BGS mainframe product line.
A 1997 industry analyst report by International Data Corporation (IDC)
defines performance management as including performance monitoring, simulation,
management and resource tracking for mainframe and open systems.--1 The IDC
study identifies performance management as the largest systems management
market segment at approximately $1.8 billion. The acquisition of the BGS
Systems BEST/1 products will position BMC Software solutions even stronger in
this market.
BGS Systems President and Chairman of the Board Dr. Harold S. Schwenk,
Jr. added, "BGS is the leader in assuring high levels of application
performance across the enterprise and we are
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1--Copyright 1997 IDC. "Systems Management Software: 1997 Worldwide
Markets and Trends"
This news release contains forward looking information as indicated by words
such as will, should, would, expects and other words that contemplate future
events. Numerous important factors affect the company's operating results and
could cause the company's actual results from the transaction discussed in this
press release to differ materially from the results indicated by this press
release or by any other forward looking statements made by, or on behalf of, the
company. There can be no assurance that future results, including the results
of the combined companies, will meet expectations, estimates or projections.
These factors include, but are not limited to, the following: 1) the high
degree of difficulty of integrating different software products and
technologies; 2) the general risks associated with mergers of high technology
companies, including the potential loss of key personnel and cultural conflicts;
3) the extreme unpredictability of the financial and operating results of the
combined entity; 4) the continually increasing levels of competition in the
performance and systems management markets; and 5) the additional risks and
important factors described in BMC Software Inc.'s Quarterly Report on Form 10-Q
for the quarter ended September 30, 1997; Annual Report to Stockholders for
fiscal 1997; Annual Report to Stockholders on Form 10-K for the fiscal year
ended March 31, 1997 and other filings with the SEC and in BGS Systems, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended October 30, 1997; Annual
Report to Stockholders for fiscal 1997; Annual Report to Stockholders on Form
10-K for the fiscal year ended January 31, 1997 and other filings with the SEC.
BMC Software, the BMC Software logo and all other product or service names are
registered trademarks or trademarks of BMC Software, Inc. in the USA and in
other selected countries. (R) and (TM) indicate USA registration or USA
trademark. Other logos and product/trade names mentioned are registered
trademarks or trademarks of their respective companies. BMC Software is an
Equal Opportunity Employer.
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thrilled at the prospect of combining our technologies with BMC Software to
provide a new standard of performance management. We admire BMC Software's
success in establishing PATROL as a defacto standard for monitoring and event
management. BMC Software's ability to establish the PATROL franchise, while
maintaining impressive growth in its mainframe business, is just the type of
business model that we want to emulate. Our performance management expertise,
combined with BMC Software's recognized status as an application/data
management leader makes this merger a natural fit. This strategic combination
of our businesses will allow our shareholders and our employees to participate
in the success of the combined companies."
The companies have scheduled two conference calls today to discuss the
acquisition in more detail. Parties interested in participating in the
conference calls may contact the numbers below. More information regarding the
acquisition can be found at http://www.bmc.com/bgs.
o FINANCIAL ANALYST TELECONFERENCE: 7:30 a.m. CST/8:30 a.m.
EST, (847) 413-3550
o TRADE ANALYSTS AND PRESS TELECONFERENCE: 9:30 a.m. CST/10:30
a.m. EST, (847) 413-2448
ABOUT BMC SOFTWARE
BMC Software, Inc. (NASD: BMCS) is a worldwide developer and vendor
of more than 160 software solutions that improve the availability, performance
and recoverability of business-critical applications and data. BMC Software is
the world's 12th largest independent software vendor and a Forbes 500 company,
with calendar 1997 revenues exceeding $675 million. The company is
headquartered in Houston, Texas with offices, distributors and agents in 50
markets worldwide. For more information on BMC Software, access the World Wide
Web at www.bmc.com or call (800) 841-2031 or (713) 918-8800.
ABOUT BGS SYSTEMS
BGS Systems, Inc., founded in 1975, is a public company with
headquarters in Waltham, MA. BEST/1 Performance Assurance products are part of
the BGS Enterprise-Wide Performance Assurance framework. BEST/1 software
solutions give organizations the ability to avoid risk and save money by
understanding how business applications are performing today and predicting how
they will perform in the future. Our consistent approach to managing
performance and capacity across major computing platforms and networked
environments (including UNIX, NT, MVS, VM, AS/400, Open/VMS, and OS/2) is in
use today at over 30,000 installations throughout the world. For more
information, please contact Jim McGuire, chief operating officer of BGS Systems
Inc., One First Avenue, Waltham, MA 02254-9111 or access the World Wide Web at
www.bgs.com.