Acquisition Expands BluePhoenix's Addressable Market Size by an Estimated $5 Billion Over Next Fifteen Years With a Focus on Midrange Computing Market HERZLIA, Israel, August 1 /PRNewswire-FirstCall/ -- BluePhoenixSolutions Ltd. (NASDAQ: BPHX), a leading provider of value drivenmodernization solutions for legacy information systems, today announced thesigning of a letter of intent (LOI) for the strategic acquisition, by wayof merger, of Amalgamated Software North America Inc. (ASNA), a privatecompany based in San Antonio, Texas. The consideration to be paid is $9.5million in cash at closing. BluePhoenix will fund the acquisition from itsavailable cash. BluePhoenix will also pay an earn-out to ASNA shareholders if certainprofit targets are achieved by ASNA. The additional consideration will becalculated incrementally based on a multiple of between 6.5x to 8x ofASNA's average net profit in the years 2008 and 2009, provided that theaverage annual net profit during these two years exceeds $1.5 million. Thecompletion of the acquisition is subject to BluePhoenix's due-diligence ofASNA and the execution of definitive agreements. ASNA has been developing visual programming and systems software forthe midrange community since 1982. ASNA Monarch is a fully integratedsolution for transforming RPG applications to the Microsoft .NET platform.ASNA is a Microsoft Gold Certified Partner, a Microsoft Visual StudioIndustry Partner, an IBM Tools Network Partner, and an Advanced Tier Memberof IBM's PartnerWorld for Developers. "We are extremely excited to have the ASNA team join forces withBluePhoenix to expand our modernization offering to enterprises runninglegacy applications on the IBM AS/400, iSeries and System i," said ArikKilman, CEO of BluePhoenix. "There are hundreds of thousands of thesesystems around the globe and a multitude of companies who are facing themounting challenge of modernizing their RPG-based applications." "We look forward to providing these enterprises both the software toolsand services needed to successfully tackle these challenges," concludedKilman. "The ASNA acquisition expands our addressable market size by anestimated $5 billion over the next fifteen years, in software sales andservices. It is accretive, and will contribute nicely to our bottom line." About BluePhoenix Solutions (http://www.bphx.com) BluePhoenix Solutions (NASDAQ: BPHX) is a leading provider ofvalue-driven modernization solutions for legacy information systems.BluePhoenix offerings include a comprehensive suite of tools and servicesfrom global IT asset assessment and impact analysis to automated databaseand application migration, rehosting, and renewal. Leveraging over 20 yearsof best-practice domain expertise, BluePhoenix works closely with itscustomers to ascertain which assets should be migrated, redeveloped, orwrapped for reuse as services or business processes, to protect andincrease the value of their business applications and legacy systems withminimized risk and downtime. BluePhoenix provides modernization solutions to companies from diverseindustries and vertical markets such as automotive, banking and financialservices, insurance, manufacturing, and retail. Among its prestigiouscustomers are: Aflac, DaimlerChrysler, Danish Commerce and CompaniesAgency, Europe Assistance, Lawson Products, Los Angeles County EmployeesRetirement Association, Merrill Lynch, SDC Udvikling, and TEMENOS.BluePhoenix has 15 offices in the USA, UK, Denmark, Germany, Italy, France,The Netherlands, Romania, Russia, Cyprus, South Korea, Australia, andIsrael. SAFE HARBOR: Certain statements contained in this release may be deemedforward-looking statements, with respect to plans, projections, or futureperformance of the Company, the occurrence of which involves certain risksand uncertainties that could cause actual plans to differ materially fromthese statements. These risks and uncertainties include but are not limitedto: market demand for the Company's tools, successful implementation of theCompany's tools, competitive factors, the ability to manage the Company'sgrowth, the ability to recruit and retrain additional software personnel,and the ability to develop new business lines. This press release is alsoavailable at http://www.bphx.com. All names and trademarks are their owners'property. Company Contact Varda Sagiv Chief Financial Officer BluePhoenix Solutions +972-9-9526-110 VSagiv@bphx.com Investor Contact Paul Holm H.L. Lanzet +1-212-888-4570 paulmholm@gmail.com
