FILED BY SERENA SOFTWARE, INC. PURSUANT TO RULE 425
UNDER THE SECURITIES ACT OF 1933 AND DEEMED
FILED PURSUANT TO RULE 14d-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: MERANT PLC
COMMISSION FILE NO. 000-19696
SERENA to Acquire Merant
Analyst / Investor Presentation
Safe Harbor
Forward Looking Statements
Statements made in this presentation that state SERENA’s management’s intentions, hopes, beliefs, expectations or predictions of the future, including the Company’s Targets in its Business Model, are forward looking statements. All forward looking statements are made as of today and SERENA disclaims any duty to update such statements. It is important to note that the Company’s actual results could differ materially from those projected in such forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, our reliance on our mainframe products for revenue, the percentage of license revenue typically closed at the end of each quarter making estimation of operating results prior to the end of the quarter extremely uncertain, weak economic conditions worldwide which may continue to affect the overall demand for software and services, which has resulted in and could continue to result in decreased revenues or lower revenue growth rates, changes in revenue mix and seasonality, our ability to deliver our products on the distributed systems platform, dependence on revenues from our installed base, continued demand for additional mainframe MIPS capacity, successful integration of our recent acquisition, expansion of our international organizations and our ability to manage our growth. Information about potential factors which could affect the Company’s financial results is included in the Company’s Form 10-K filed on April 29, 2003 and Form 10-Q filed on December 12, 2003. Copies of these filings may be obtained by contacting SERENA or the SEC.
Directors Responsibility
The directors of SERENA accept responsibility for the information contained in this presentation in so far as it relates to the SERENA Group, the SERENA directors and their interests. To the best of the knowledge and belief of the SERENA directors (who have taken reasonable care to ensure that such is the case) the information contained in this presentation for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
The directors of Merant accept responsibility for the information contained in this presentation in so far as it relates to the Merant Group, the Merant directors and their interests. To the best of the knowledge and belief of the Merant directors (who have taken reasonable care to ensure that such is the case) the information contained in this presentation for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
UK Takeover Restrictions
UK rules prohibit providing any shareholder or potential shareholder with any additional material information that is not contained in the press release issued on March 3rd
In addition, because of the complexity of the interaction between the US and UK regulations, projections about future results and the value of expected cost synergies between the two companies will not be available until the offer ends
In addition, a representative from Lehman Brothers will need to be present on all investor presentations, meetings and conference calls in order to certify daily that no new material has been provided
Merant Acquisition Overview
Offer of $18.03 per ADR (£1.95 per ordinary share)
– Represents a 25% premium to Merant’s closing price on the day prior to announcement
– Values entire issued share capital at $380 million
– As of January 31, 2004 Merant had net cash and equivalents $71 million Consideration consists of 70% cash and 30% stock
– Stock component based on a fixed exchange ratio
– Shares issued by SRNA to be registered on a S-4 Transaction is likely to close by late April or early May
– Could take longer based on regulatory delays
Trailing 12 month combined revenue of $225M
Expected Synergies
Projections about future results and the value of expected cost synergies will not be available until the offer ends Significant potential cost savings in the following areas:
– Dual exchange listing
– Dual public company compliance obligations
– Dual administrative infrastructures
– A number of other duplicative areas and initiatives
SERENA’s commitment to making acquisitions that are strategic, can be made accretive and are digestible has not changed
Revenue Model
Fiscal year ends January 31 FY 2003 FY 2004
($000s) Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04
Software License $9,561 $10,305 $ 11,502 $12,792 $10,852 $ 10,047$ 10,963 $ 13,608
Maintenance 10,775 11,016 11,519 11,911 12,449 13,121 13,568
Service 1,620 1,677 1,966 1,787 1,604 2,417 2,571 2,444
Total Revenue $22,046 $22,998 $ $ 26,098 $24,367 $ 24,913 $ 26,655 $ 29,620
ECM License Revenue $5,800 $ 6,300 $ 7,100 $ 8,443 $7,700 $ 6,600 $7,900 $ 8,900
% of License Revenue 44% 61% 62% 66% 71% 66% 72% 65%
Mainframe License Revenue $8,509 $ 7,110 $ 8,742 $11,001 $8,356 $ 6,531 $7,016 $ 5,761
% of License Revenue 89% 69% 76% 86% 77% 65% 64% 42%
Distributed License Revenue $1,052 $ 3,195 $ 2,760 $ 1,791 $2,496 $ 3,516 $3,947 $ 3,122
% of License Revenue 11% 31% 24% 14% 23% 35% 36% 23%
Maintenance revenue recognized ratably over the life of the contract
Approximately 95% annual maintenance renewal rate of core Software Change Management products
Highly Predictable Revenue Mix
$millions
$22.1 $23.0 $24.6 $26.1 $24.4 $24.9 $26.7 $29.6
Software Licenses Maintenance Professional Services
Balance Sheet Overview
$ in millions As of Jan 31, 2004
Cash and Investments $ 377
Accounts Receivable $ 15
Deferred Revenue $ 39
Purchase accounting will reduce Merant deferred revenue (currently $45 mil)
DSO of 47 Days
LTM Cash Flow from Operations of $34 million
Over $377 million in cash post-offering
Conservative Revenue Recognition
Acquisition Rationale
Creates the second largest provider of ECM software solutions
The combination will serve over 15,000 customers, at least 46 of the Fortune 50 and the 10 largest US financial institutions
Provides SERENA with a very profitable and predictable maintenance revenue stream
Potential to up sell and cross sell products and services
Greatly increases SERENA’s geographic reach
Significantly accelerates SERENA’s ability to bring SERENA Application Framework for Enterprise, or SAFE, products to market and increases SERENA’s competitive differentiation
Merant Overview
Markets: Fortune 100 and Global 2000 including aerospace and defense, retail, athletic apparel, pharmaceuticals, insurance, banking and financial services, and IT and professional services
Development Centers: United States, United Kingdom, Denmark and India
Primary Products: Merant Professional (PVCS), Merant Dimensions and Merant Collage
Companion Products: Merant Build, Merant Meritage, Merant Modello and Merant Mover
New management team has returned company to profitability
The New SERENA
A Force in the ECM / SCM Marketplace
Over 3,600 customer sites
Leading Mainframe Products & Solutions
No presence in APAC region
Solid support organization
Over 15,000 customer sites
Leading Distributed Products & Solutions
Strong presence in APAC
Higher cost infrastructure
Very large customer base
Products & Solutions for any Environment
Strong worldwide presence
Opportunities to reduce costs
Clear #2 in SCM Market
Market Share Pre and Post Merger
Pre Merger Post Merger
Source: IDC June 2003.
Compelling Synergies
Products – Cross sell/up sell
Channels – Integrators/Partners
Geographies – APAC & Europe
Strategies – ECM to ALM
Cost reductions
Combining Leading Products
“The PVCS brand has strong name recognition and market presence.”
“Serena’s flagship ChangeMan brand has a long history and strong reputation in the mainframe SCM arena”
IDC – June, 2003
Product Synergy
ECM
Role Based
Process Driven
Cross-Platform
Hi-End SCM
Distributed Teams
Release Management
Parallel and
Concurrent Development
Entry-Level SCM
Individual Teams,
Version Control,
Seamless Integration with IDEs
TeamTrack
Role-based access to process driven, cross-platform SCM
ChangeMan ZMF
Leading Enterprise level solution for Mainframe SCM
Dimensions
Leading Enterprise level solution for Distributed SCM
ChangeMan DS
Full-featured, high-end SCM Very competitive with ClearCase
PVCS
Leading entry level solution for Distributed SCM
Dimensions for z/OS
Good entry-level solution for Mainframe SCM
Channel Synergy
Serena
– Direct sales in US, UK, Central Europe, Northern Europe
Merant
– Same plus Australia, Pac Rim, Italy, India
Indirect
– Serena: IBMGS, ACS, CSC, D&T, SAIC
– Merant: Accenture, Ingram Micro
Merant – Strong Microsoft relationship
Serena – Strong IBM relationship
Similar Application Lifecycle Mgmt Strategies
Serena Strategy
Demand Development QA Operations Management Management Management Management
Application Life Cycle Management
Merant Strategy
Dashboard
Requirements Development Production Help Desk
Closed Loop
SAFE™ Portal (Role Based Views)
ACM Request Mgmt Requirements Mgmt Quality Assurance
ETC… Solution Solution Solution Process Bridge
SAFE™ Platform (Lifecycle Engine, DB, Runtime)
SAFE™ Serena Connectors SAFE™ External Connectors SAFE™ Designer
(Business Rules Authoring)
SERENA Tools 3rd Party Tools / Solutions
ChangeMan DS
ChangeMan ZMF SAP, Mercury, Peregrine,
MS Project, etc.
On March 8, 2004, SERENA Software, Inc. filed with the Securities and Exchange Commission (the "SEC") a registration statement that includes a prospectus of SERENA, and other relevant materials in connection with the proposed offer. Upon commencement of the offer, SERENA will file a Schedule TO containing a tender offer statement and other relevant materials. Investors and security holders of Merant plc are urged to read the prospectus and the other relevant materials before making any decision to tender their shares because they contain important information about SERENA, Merant and the proposed transaction. The prospectus, the tender offer statement (when filed), other relevant materials, and any other documents filed by SERENA or Merant with the SEC, may be obtained free of charge at the Securities and Exchange Commission's web site at http://www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by SERENA by contacting SERENA Investor Relations, 2755 Campus Drive, 3rd Floor, San Mateo, California 94403-2538, USA, telephone: (650) 522 6600. Investors and security holders may obtain free copies of the documents filed with the SEC by Merant by contacting Merant Investor Relations, 3445 NW 211th Terrace, Hillsboro, Oregon 97124, USA, telephone: (503) 617 2753.
Disciplined Acquisition Strategy
Criteria:
Strategic
Accretive
Digestible
TeamShare Acquisition:
Highly successful, rapid integration
Best Request/Issue Management product
Adds 600 customers
Provides opportunity to penetrate existing customers with new applications—Dell
$18 million purchase price, June 2003