Date: Mon, 07 Feb 2000 08:53:27 -0500 From: Judith O'Brien <juditho@corel.ca> To: Jonathan Corbet <corbet@eklektix.com> Subject: Corel and Inprise/Borland to merge into Linux powerhouse Corel – Inprise/Borland Merger to Create Linux Powerhouse Will Provide Customers with Linux Operating System, Applications and Developer Tools New York, February 07, 2000 - Corel Corporation (NASDAQ: CORL TSE: COR) and Inprise/Borland Corporation (NASDAQ: INPR) today announced that they have entered into a definitive merger agreement. Upon completion of the merger, the combined organization, called Corel, will be a Linux powerhouse, offering a single source for end-to-end solutions featuring a range of productivity applications, development tools, and professional services for all major platforms. The valuation for the entire transaction is approximately US$2.44 billion. Corel is one of the world's largest developers of business productivity, graphics and operating systems solutions. Inprise/Borland Corporation is a leading provider of Internet access infrastructure and application development tools and services. In 1999, the two companies had total revenues of US$418 million and currently have over US$200 million in cash. The merger will be accounted for as a purchase transaction under Canadian GAAP and is expected to be accretive to Corel's cash earnings per share before the amortization of goodwill. The Agreement Upon completion of the merger, Inprise/Borland will operate as a wholly-owned subsidiary of Corel. Dr. Michael Cowpland will remain as President, CEO and a director of the corporation. Dale Fuller, Inprise/Borland's interim President and CEO, will be appointed as Chairman of Corel's Board of Directors. The operations of the combined entity will be headquartered in Ottawa, with the Inprise/Borland operations remaining in its current Silicon Valley locations. The combined businesses will have a presence in over 100 countries. Under the terms of the agreement, Inprise/Borland shareholders will receive 0.747 Corel common shares for each share of Inprise/Borland common stock held. As a result of the merger, Corel expects to issue approximately 53.7 million common shares in the aggregate, in exchange for Inprise/Borland's outstanding shares. Based on the closing price of US$20.00 per share of Corel as of February 4, 2000, this represents a value of $14.94 per share of Inprise/Borland, giving a US$2.44 billion valuation for the entire transaction, on a fully diluted basis. Upon closing of the transaction, Inprise/Borland shareholders will own approximately 44 percent of Corel, with the balance being held by Corel's current shareholders. The boards of directors of both companies have approved the transaction. The Partners “With Inprise/Borland's leadership in the software development community and Corel's Linux desktop operating system and productivity applications, we have an extraordinary opportunity to reach all facets of the exploding Linux market,” said Corel president Michael Cowpland, “This merger enables us to offer end-to-end product solutions and global support to all of our shared customers.” "This is about responding to and leading the rapidly changing face of computing," said Inprise/Borland president Dale Fuller. "Mike and I have a shared vision: To lead in the development of Linux and other emerging technologies that will bridge and accelerate the value of the Internet, to the world. Together, we're already well along this path. With our combined base of 55 million customers – including small to medium enterprise customers, desktop client customers, and enterprise developers – our technologies will enable our customers to migrate to Linux faster.”" The two companies share a dedication to innovation, high quality products and services, and a commitment to providing solutions for the Linux environment. With one of the largest teams of Linux developers, the combined organization will be able to deliver more powerful solutions faster. The merger will allow the combined companies to provide a roadmap to the future by offering training, education, and migration paths so customers can fully exploit the power of Linux-based Internet solutions. Both companies will also continue to provide support for open standards, ensuring compatibility across Linux, Windows and Solaris platforms and applications. The combined businesses will benefit from shared resources in research and development, sales and marketing, thus allowing the combined Company to reduce expenses through the elimination of duplicated resources in their global retail and corporate channels. The Move to Linux Linux is a powerful operating system that runs on hardware ranging from PCs and Macs to Alphas and more. Linux is being used by a fast-growing number of programmers worldwide as a platform for running Internet servers and software applications. International Data Corporation (IDC), a Massachusetts-based industry research organization, forecasts that the Linux operating environment, including both client and server, will grow at a compound annual rate of greater than 25 percent through 2003. Corel's work on the Linux operating system grew out of its earlier efforts developing software for the Unix operating system. With the release of WordPerfect 8 for Linux in December 1998, Corel firmly established itself as a leading software developer for the open source operating system. Corel also developed the first Linux operating system (OS) built specifically for the desktop. Also a leading innovator for the Linux community, Inprise/Borland provides the tools to create world-class enterprise applications for the Linux operating system. Most recently, Inprise/Borland announced a free download of JBuilder 3 Foundation, a pure Java development environment for Linux; Kylix, planned to be one of the first rapid-application development (RAD) tools for the Linux platform, is scheduled to be available in mid-2000; and a free download of the Linux Just-In-Time (JIT) compiler. The merger is subject to certain customary conditions, including shareholder approval from Inprise/Borland and Corel, compliance with the Hart-Scott-Rodino Antitrust Improvements Act, and certain other regulatory filings and approvals. The transaction is expected to close in the late spring and is expected to be tax-free to Inprise/Borland shareholders. Media Alert Corel Corporation and Inprise/Borland Corporation invite you to join them for a teleconference today, February 7, at 11:30 am EST. Senior management of both companies will discuss today's announcement of the Corel Inprise/Borland merger and follow with a question–and–answer session for members of the press. The teleconference will feature Dr. Michael Cowpland, Chairman, President and Chief Executive Officer of Corel Corporation, and Dale Fuller, interim President and Chief Executive Officer of Inprise/Borland Corporation. Should you wish to participate, please dial the teleconference number (800) 230-1951 (U.S.) or +1 (612) 288-0340 (International) approximately ten minutes before 11:30 am EST (New York City, USA). An instant replay number will be provided for 7 days commencing two hours after the end of the teleconference. The instant replay number is (800) 475-6701 (U.S.) or +1 (320) 365-3844 (International), pass code access number 501365. Also available is a live, audio webcast, which can be accessed by visiting www.corel.com or www.inprise.com. Webcast starts at 11:30 a.m. EST Monday, February 7, 2000. RealPlayer® is required. -- The free Corel LINUX OS Download is NOW available! Check it out at http://linux.corel.com