Filed By: Frontstep, Inc.
Pursuant to Rule 425 under
the Securities Act of 1933
and deemed filed pursuant
to Rule 14a-12 under the
Securities Exchange Act
Subject Company: Frontstep, Inc.
Commission File No.: 0-19024
On November 25, 2002, Frontstep, Inc. issued a press release announcing the
proposed merger (the "Merger") of Frontstep, Inc. with a wholly owned subsidiary
of MAPICS, Inc.
A copy of the press release pertaining to the Merger is being filed as
Appendix A to this filing, and is incorporated herein by reference.
Appendix A
FINANCIAL CONTACTS: MARKETING CONTACTS:
Michael J. Casey Jeff Cashman
Chief Financial Officer Chief Marketing Executive
MAPICS, Inc MAPICS, Inc.
(678) 319-8359 (678) 319-8245
mike.casey@mapics.com jeff.cashman@mapics.com
Daniel P. Buettin Aggie Haslup
Vice President and Chief Financial Officer Vice President Marketing
Frontstep, Inc. Frontstep, Inc.
(614) 523-7299 (614) 523-7241
dan.buettin@frontstep.com aggie.haslup@frontstep.com
MAPICS TO ACQUIRE FRONTSTEP AND CREATE
LARGEST GLOBAL MIDRANGE ERP SOLUTIONS PROVIDER
COMMITTED EXCLUSIVELY TO MANUFACTURERS
----------------------
With Estimated Annual Revenue of Over $200 Million, the Combined Company's
Solutions have been Implemented in More than 10,000 Customer Sites Globally
ATLANTA and COLUMBUS, OH -- (Nov. 25, 2002) -- MAPICS, Inc. (Nasdaq/NM:
MAPX) and Frontstep, Inc. (Nasdaq/NM: FSTP), leading global providers of
extended enterprise solutions for world-class manufacturers, today announced the
signing of a definitive agreement whereby MAPICS will acquire Frontstep. Terms
of the acquisition include the exchange of 4.2 million shares of MAPICS' common
stock for all the outstanding shares of Frontstep and the assumption by MAPICS
of Frontstep's debt and other liabilities. This transaction will create the
largest provider of extended ERP, CRM and SCM applications that is committed
exclusively to solving the unique challenges of discrete and batch process
manufacturers. The combined company has solutions that have been implemented in
more than 10,000 customer sites worldwide. Both MAPICS and Frontstep customers
will now be served by a much larger, global company with a heritage of continual
delivery of technological innovations, practical business solutions, deep supply
chain and customer relationship management functionality and unmatched service
and support.
Dick Cook, MAPICS' president and chief executive officer, remarked, "This
combination affirms MAPICS as the premier provider of enterprise solutions that
are exclusively for manufacturers of all sizes around the world. Plans call for
offerings from both organizations to be marketed under the MAPICS brand. We are
excited about the opportunity to leverage the investment Frontstep has made in
delivering SyteLine 7 on Microsoft .NET, and we also have
substantial potential to continue building on our market success on the IBM
platform. The midrange manufacturing market has proven its appetite for
applications on both of these leading platforms and we have a firm commitment to
sustain active product development for each. In addition, the combined company
will benefit from a more balanced sales strategy with both direct and reseller
channels serving the global manufacturing market."
Cook added, "MAPICS has generated a profit from operations for the last
eight consecutive quarters, a period during which many in our industry have had
difficulty coping with the economic recession that has had a particularly severe
impact on the manufacturing sector. The Company's strong relative performance
has allowed MAPICS to maintain a liquid financial position, eliminate debt and
have the flexibility to pursue investment opportunities such as this
transaction."
"Today's announcement is exciting for the customers, prospects,
shareholders, employees and partners of both our organizations," said Stephen A.
Sasser, Frontstep's president and chief executive officer. "This combination of
two very seasoned and successful companies creates a financially stable business
that has the strength and resources to continue to support the customer base
while investing in enhancements and new product innovation. Both current and
future customers will benefit from our proven solutions, manufacturing expertise
and employee talent."
Dwight Klappich, Senior Program Director of META Group and a twenty-five
year manufacturing industry veteran, commented, "The manufacturing software
market has historically been very fragmented, and because of this, market
consolidation has been anticipated for several years. Companies, especially
mid-market manufacturing companies, now rank vendor viability very high on their
list of evaluation criteria; so it is imperative that vendors demonstrate the
ability to continually strengthen their organizations. MAPICS' acquisition of
Frontstep strengthens their organization by bringing together two established
manufacturing-focused software companies that can now leverage a large combined
customer base with new sales channels and complementary offerings."
ACQUISITION HIGHLIGHTS
MAPICS, Inc. has signed a definitive agreement to acquire Frontstep, Inc.,
formerly known as Symix, a publicly traded manufacturing applications provider
headquartered in Columbus, Ohio. Terms of the acquisition include the purchase
of all Frontstep shares for 4.2 million shares of MAPICS, Inc. common stock
subject to closing conditions. MAPICS currently has approximately 20.5 million
shares (diluted) outstanding. Frontstep shareholders will receive approximately
0.30 MAPICS shares for each share of Frontstep stock held. As part of this
combination, MAPICS will assume up to $21.5 million of Frontstep's debt as well
as certain outstanding stock options and warrants. Closing, which is expected to
occur during the first calendar quarter of 2003, remains subject to certain
conditions including, but not limited to, regulatory clearance and approval of
the acquisition by MAPICS and Frontstep stockholders at special meetings.
MAPICS reported revenues of $128.3 million for its fiscal year ended
September 30, 2002, while Frontstep recorded total revenues of $92.6 million for
its 2002 fiscal year ended June 30, 2002. MAPICS expects to record special
charges of $9 to $11 million before taxes in connection with the acquisition.
Excluding acquisition-related charges, the Company anticipates that this
transaction will be accretive in the quarter ending December 31, 2003, the first
quarter of MAPICS' fiscal 2004 year.
ABOUT MAPICS
Headquartered in Alpharetta, Georgia, and with offices around the globe,
MAPICS delivers collaborative business applications and expert consulting
services that help manufacturers become world class. By transforming operations
to achieve best-in-class performance in key business metrics, world-class
manufacturers gain market share, operate at peak efficiency and exceed customer
expectations. MAPICS solutions include an enterprise resource planning (ERP)
foundation, plus supply chain management and customer relationship management
functionality. With approximately 3,000 customers installed in 6,000 sites in
more than 70 countries, MAPICS has a strong focus and proven success in helping
create world-class manufacturers in discrete and batch process manufacturing
industries like electronics, industrial equipment, and automotive and
transportation. Our customers include such leading manufacturers as Anaren
Microwave, Inc., Dukane Corp, Volvo Construction Equipment, YORK International
Corporation, Dirona SP, Goodrich Corporation, Hartzell Propeller, Inc. and Honda
Motor Co., Ltd.
ABOUT FRONTSTEP
Frontstep is a leading global provider of software and services for
discrete, to-order manufacturers. With more than 20 years of experience,
Frontstep leverages the Microsoft .NET platform to help manufacturers create and
implement solutions - including extended ERP, customer relationship management,
and supply chain management - that simplify and streamline business processes
and operations. Through these innovative and practical solutions, manufacturers
can respond better and faster to customer demands for quality products and
services.
Frontstep, formerly Symix, is headquartered in Columbus, Ohio, and has
approximately 1,800 customers installed in 4,400 sites in more than 40 countries
worldwide.
The proposed transaction will be submitted to MAPICS' and Frontstep's
shareholders for their consideration, and MAPICS will file with the SEC a
registration statement containing the joint proxy statement-prospectus to be
used by MAPICS and Frontstep to solicit their respective shareholders' approval
of the proposed transaction, as well as other relevant documents concerning the
proposed transaction. Shareholders of MAPICS and Frontstep are urged to read the
registration statement and the joint proxy statement-prospectus regarding the
proposed transaction when they become available and any other relevant documents
filed with the SEC, as well as any amendments or supplements to those documents,
because they will contain important information. You will be able to obtain a
free copy of the joint proxy statement-prospectus included in the registration
statement, as well as other filings containing information about MAPICS and
Frontstep, at the SEC's Internet site (http://www.sec.gov).
Copies of the joint proxy statement-prospectus and the SEC filings that
will be incorporated by reference in the joint proxy statement-prospectus can
also be obtained, without charge, by directing a request to: Martin D. Avallone,
MAPICS, Inc., 1000 Windward Parkway, Suite 100, Alpharetta, Georgia 30005
(678-319-8000).
MAPICS and Frontstep and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies from the
shareholders of MAPICS and Frontstep in connection with the merger. Information
regarding those participants is included in the proxy statements for MAPICS' and
Frontstep's most recent annual shareholders' meetings, which are available at
the SEC's website. Additional
information regarding the interests of those participants may be obtained
by reading the joint proxy statement-prospectus regarding the proposed
transaction when it becomes available.
Statements in this press release or otherwise attributable to the Company
regarding the Company's business which are not historical facts, including those
regarding benefits associated with the contemplated transaction, are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Words such as "will,"
"committed," "plans," "leverage," "potential," "sustain," "strategy,"
"investing," "expect," "anticipate," "believes" and similar expressions as well
as statements regarding the expected amount of special charges and anticipated
accretion are intended to identify such forward-looking statements. These
forward-looking statements are not guarantees of performance and are inherently
subject to risks and uncertainties, none of which can be predicted or
anticipated. Future events and actual results, financial or otherwise, could
differ materially from those contained herein. Important factors that could
cause the actual results to differ materially from the Company's expectations
include the ability of the parties to consummate the transaction, including
obtaining acceptable financing and other approvals necessary, the ability of the
parties to successfully manage and establish relationships with third parties,
the ability of the parties to successfully and profitably integrate products and
operations, competition in the market for business software in the manufacturing
industry, as well as other factors set forth from time to time in the Company's
reports filed with the Securities and Exchange Commission. The Company
undertakes no obligation to revise or publicly update such forward-looking
statements whether as result of new information or otherwise.