Sopra Group Announces a Plan of Merger, via its Subsidiary Axway, with Tumbleweed Communications

PRLog (Press Release) – Jun 10, 2008 – Sopra Group (Euronext Paris: SOP) and Tumbleweed Communications (TMWD) today announced a plan of merger in which Sopra Group, via its subsidiary Axway, would acquire all the outstanding Tumbleweed stock in cash at $2.70 per share. The proposed transaction is subject to customary closing conditions including regulatory and Tumbleweed stockholder approvals, and is expected to close in the third calendar quarter of 2008. Tumbleweed’s operations will then be combined with those of Axway. Together, Axway and Tumbleweed will offer integrated collaborative business solutions to more than 11,000 customers globally.

Tumbleweed provides Secure Content Delivery Solutions to more than 3,300 customers in various industries including financial services, healthcare and government. Tumbleweed reported revenue of $57 million (approximately €38 million) in fiscal 2007. Sopra Group intends to merge the businesses of Tumbleweed with those of its subsidiary, Axway, a leading global provider of collaborative business solutions which reported fiscal 2007 revenue of €145 million ($218 million) and a 10% EBIT margin.

Sopra Group expects this transaction to be accretive. In 2009, the combined entity of Axway and Tumbleweed expects to generate revenue of around €230 million with an operating margin between 12-15%.

The CEO of Axway, Christophe Fabre, and the CEO of Tumbleweed, Jim Scullion, share a common vision about the market and the solutions required to drive it. According to Scullion, “Tumbleweed is a natural fit with Axway. We are confident that the combined product offering will benefit customers from both companies and increase long-term growth prospects.”

Fabre adds, “The combined entity is expected to more than double Axway’s North American revenue. In addition, our respective customers will have access to a highly attractive set of products, solutions and services.”

Andy Wilkinson, Senior Vice President of Axway Asia Pacific commented, “The merger of Tumbleweed and Axway will strengthen our position in the Asia Pacific region. Axway has offices in 7 cities in Asia and the addition of the Tumbleweed presence in the region will provide an extended sales and support capability for both sets of products.  Tumbleweed also has a local office in Australia for Axway to better support its distribution network.”  

The proposed transaction has been approved by Sopra Group’s Board of Directors. Tumbleweed’s Board of Directors also approved the transaction and will recommend that its shareholders accept the offer. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the third quarter of 2008.

Sopra Group expects to fund the transaction through its existing lines of credit. Given the complementary nature of Axway’s and Tumbleweed’s businesses, Sopra Group expects to recognize synergies through both revenue growth and cost savings.

Additional Information and where to find it

This communication may be deemed to be solicitation material in respect of the proposed merger of Tumbleweed by Sopra Group and Axway. In connection with the proposed merger, Axway and Tumbleweed intend to file relevant materials with the SEC, including Tumbleweed's proxy statement on Schedule 14A. STOCKHOLDERS OF TUMBLEWEED ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING TUMBLEWEED’S PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents free of charge at the SEC’s web site, http://www.sec.gov, and Tumbleweed stockholders will receive information at an appropriate time on how to obtain transaction-related documents for free from Tumbleweed. Such documents are not currently available.

Participants in Solicitation

The directors of Sopra Group, Axway, and Tumbleweed, may be deemed to be participants in the solicitation of proxies from the holders of Tumbleweed common stock in respect of the proposed transaction. Information about the directors of Sopra Group is set forth in the 2007 Reference Document which was filed with the AMF (Autorité des marchés financiers) on April 23, 2008. In addition, the following executives of Sopra Group/Axway may deemed to be participants: Christophe Fabre, Dave Bennett, Scott Hausman et Kathleen Clark Bracco. Information about the directors and executive officers of Tumbleweed is set forth in the proxy statement for Tumbleweed's 2008 Annual Meeting of Stockholders, which was filed with the SEC on April 30, 2008. Investors may obtain additional information regarding the interest of such participants by reading the proxy statement regarding the merger when it becomes available.

Forward-Looking Statements

This press release and the information meeting announced in it contain forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, actual results could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including the anticipated timing of filings and approvals relating to the transaction; the expected timing of the completion of the transaction; the expected benefits and costs of the transaction; management plans relating to the transaction; the ability to complete the transaction considering the various closing conditions, including those conditions related to antitrust and CFIUS (Exon-Florio) regulations; any projections of earnings, revenues, synergies, accretion, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations, including the execution of integration plans; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include risks related to the timing or ultimate completion of the transaction; the possibility that expected benefits may not materialize as expected; that, prior to the completion of the transaction, Tumbleweed’s business may not perform as expected due to uncertainty; that the parties are unable to successfully implement integration strategies; and other risks and uncertainties that are beyond the control of Sopra Group and Tumbleweed. Sopra Group and Tumbleweed disclaim any obligation to update or correct any forward-looking statements made herein due to the occurrence of events after the issuance of this press release.

About Sopra Group

One of the leaders in the European consulting and IT services market, Sopra Group generated revenue of 1 billion euros in 2007 and has a human and intellectual resource potential of over 11,000 people. Thanks to a longstanding culture of excellence and strong sector-specific, functional and technological know-how, the Group offers its clients an end to end approach based on a well-honed business model. Sopra Group’s ambition is to allow its clients to focus on transformation projects that will give them a competitive edge and help them drive growth. Sopra Group’s savoir-faire encompasses prior strategic reflection through to the supervision and implementation of major systems integration and application outsourcing projects. The Group also pursues the worldwide deployment of its activities in both application integration and business process management through its subsidiary Axway, one of the leading providers of Collaborative Business Solutions, with a complete range of solutions and services. For more information, please go to our website www.sopragroup.com