MA The Memco Experience Israel Mazin Chairman Agenda

M&A The Memco Experience Israel Mazin, Chairman

Agenda • • • About Emicom Group About Memco’s M&A experience • • • Buy side Acquisition by Platinum Acquisition by CA The M&A Process Summary www. emicomgroup. com 2

About Emicom Group • Teams with exceptional entrepreneurs to rapidly build • • • world-class companies Founded by former Memco Software Management Established strong presence both in the US and Israel Provides funding and works closely with its partner companies to guide and assist them on: Business Strategy, R&D, Sales & Marketing, Partnerships & Alliances and attracting additional funding www. emicomgroup. com 3

About Memco • Focused offering addressing fast-growing enterprise • security market Completed IPO in October 1996 • 9 successful quarters as public company • • Recognized technological leadership Strong financial momentum 8/98 - Announced Merger with Platinum Technology 3/99 - Announced acquisition of Platinum Technology by Computer Associates (CA) www. emicomgroup. com 4

M&A- Overview • • Make your potential acquirers “run after you…” Building a profitable and an independent company with exclusive control of a certain market will make the Giant Enterprises interested in you www. emicomgroup. com 5

Memco’s M&A experience Background • Memco achieved leadership in Unix server security niche, with typically large deals • Mature company with strong management team • Stock relatively high www. emicomgroup. com 6

Memco’s M&A experience • • Buy Side Strategy • • Highly focused proactive search for acquisition targets Open to merger discussions with other relevant parties In 5/98 Memco acquired 2 companies for a total of ~$55 M (stock & cash): • • Abirnet, a leading Intrusion Detection software provider from Yokneam, Israel NIT, a young security software firm focused on NT security, from California, U. S. A www. emicomgroup. com 7

Memco’s M&A experience Acquisition by Platinum • • 8/98 - 3 years after OEM partnership began, 2 years after Memco’s IPO Memco merges into Platinum, to become the Security Line of Business Fixed exchange ratio of 0. 836 shares of PLATINUM Common Stock for each Memco Ordinary Share Valued at ~$500 M on date of announcement www. emicomgroup. com 8

Memco’s M&A experience Acquisition by Computer Associates • • 5 months after announcement of Platinum deal, 5 minutes after it closed, CA buys Platinum Cash deal, keeps Memco valuation at ~$550 M Memco continues responsibility for most of security product development for CA- as an R&D center in Israel Memco US operations melded into CA’s www. emicomgroup. com 9

The M&A Process • Long period for closing (formal approvals, anti-trust, courts…) • • Usually this period lasts 2 -3 months For Memco it lasted almost 12 months! Manage a Transition Period Lots of uncertainties • • • Issue clear roadmaps - as early as possible, and to everyone employees, customers Be attentive and quick to respond - cultural and personal issues can be obstacles to good M&As Keep and retain employee motivation www. emicomgroup. com 10

Summary • • • M&As are a perfectly natural and logical part of the way high tech companies grow and mature M&As can be beneficial to both acquiring and acquired companies - if we understand the problems and risks and manage them “Convenient“ way for exit… www. emicomgroup. com 11

Thank You! www. emicomgroup. com