MetaSolv Bids to Buy Orchestream

Orchestream board recommends acceptance of the offer of £0.06 per share, or approximately £7.9M ($12.4M) for the whole company

December 9, 2002

3 Min Read

PLANO, Texas -- MetaSolv, Inc. (Nasdaq: MSLV), a global leader in communications management solutions for next-generation and traditional networks and services, announced today an offer to acquire all of the ordinary shares of London-based Orchestream (LSE: OCH), a recognized leader in IP service activation software solutions for wireline and mobile carriers. Under the terms of the offer, MetaSolv will pay £0.06 per share, valuing Orchestream at approximately £7.9m ($12.4 million). "Meeting rapidly increasing demand for high margin IP services is a key challenge for wireline and mobile service providers. The offer to acquire Orchestream is a clear signal that MetaSolv is committed to extending its global leadership position in OSS, particularly in these fast-growing segments," said Jim Janicki, CEO, MetaSolv Software, Inc. "The Orchestream acquisition supports MetaSolv's long term growth strategy, and accelerates our progress in capturing additional significant OSS market share and mind share around the world."The Orchestream acquisition furthers MetaSolv's growth strategy and strengthens its leadership position in IP service activation, including multi-vendor IP VPN services. As a result of the ongoing rapid migration of global communications networks to cost-efficient IP technologies, market research firm IDC predicts that overall IP service revenues will grow at 27 percent CAGR, with IP VPN service revenues experiencing 57.9 percent CAGR over the next three to four years.With the acquisition, MetaSolv will add a number of top tier service providers to its global customer base, such as Orange, France Telecom, and Sonera, as well as expand its penetration into existing major service provider customers such as Vodafone, Verizon, AT&T, Cable & Wireless, and Telstra. The acquisition also will further MetaSolv's key strategic growth initiatives, which are focused on globalization and leadership in operations support system (OSS) solutions for IP and mobile services.Founded in 1996, Orchestream is based in London with regional offices in key global markets. Orchestream's award-winning, flagship product offering is Service Activator, IP service activation solution, which supports equipment from major infrastructure providers including Cisco and Juniper Networks, and has attracted support from leading systems integration firms. Service Activator complements MetaSolv's broad portfolio of integrated and modular OSS solutions, with advanced support for the critical building blocks for VPN management, including MPLS and QoS. Financial details:
MetaSolv is offering to purchase the approximately 132 million ordinary shares of Orchestream for £0.06 per share ($12.4 million in total) under a tender offer in accordance with applicable United Kingdom law and regulation. Closing of the transaction is contingent upon acceptance of the offer by holders of at least 90% of Orchestream's ordinary shares (or fewer, if MetaSolv elects under UK law and regulation). Orchestream's Board of Directors has approved the offer and has recommended that its ordinary shareholders accept the offer. Orchestream's board has received commitments to vote in favor of the transaction from shareholders representing approximately 34 percent of the outstanding shares. The transaction is expected to close late this year or early in 2003.For the nine months ended September 30, 2002, Orchestream has reported revenue of £6 million ($9.4 million). For the quarter ended September 30, 2002, Orchestream reported revenue of £2.1 million ($3.3 million) and a loss before tax of £3.6 million ($5.7 million), including non-recurring charges of £1.2 million. As of September 30, 2002, Orchestream had cash on hand of £7.3 million ($11.5 million), and tangible book value of £6.9 million ($10.8 million). MetaSolv Software Inc. Orchestream Holdings plc

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