1. SSA Global Shelley Isenberg SVP Acquisitions and Corporate Development February 12, 2004 Shelley Isenberg SVP Acquisitions and Corporate Development February 12, 2004 M&A Today: Technology, Information and Business Services What Buyers Want

2. Agenda  Direction of the Enterprise Resource Planning Software Industry  About SSA  Acquisitions  a tactic to achieve the strategy  what buyers want & what they can provide  “land mines” and how to deal with them  Summary

3. Direction of the ERP Industry  Many acquisitions in our space  Investors seek to exit as they don’t see the expected results  Too many ERP players, not enough customers  Less expensive to buy software than build it  Less expensive to acquire customers that organically grow the base  Mid market is seen as the “sweet spot”

4. About SSA  Mission Statement Our mission is to help customers move their businesses forward faster by:  Delivering the right solutions  Implementing it quickly  Making it pay  Industry Ranking  #1 enterprise software provider in the manufacturing space  #4 player in the extended ERP market  Financial Highlights  Revenue this FY will be $700+m  EBITA 20+%  Global Footprint  3,600 employees  47 direct and 74 affiliate offices worldwide  Company Mantra  “Acquire market share; develop customer share”  “Keep customers for life”

5.  Become a global market leader in mid-market ERP space  Vertically focused  Triple customer base  Provide more of an “end to end” offering  Morph from a “software company” to a “solutions provider”  Get more of “customer’s share of wallet”  Grow revenues from approx. $130 m (FY01) to over $1 b (FY04) Strategy (since FY02)

6.  10% organic growth  Significant acquisitive growth  Maintain 20% margins  Commoditize pricing Tactics to Achieve our Strategy

7. Value Creation:  Cheapest way to grow  Fastest way to grow  Large customer base provides opportunities:  cross selling  commoditize pricing  recurring revenue base  Synergistic cost cutting by fully integrating  Create end to end offering to get more of customers’ IT spend Why SSA Acquires

8.  Customer Base Targets  $20+ m to $400 m in revenue  30+ % recurring revenue  Manufacturing or distribution industry focus  Global or regional  Unprofitable  Extension Product Targets  Proven successful product  J2EE, Java, WebSphere technology  Fill a “white space” within our “end to end” offering  Target has a good product in need of global distribution arm  Unprofitable Target Profiles

9. To be qualified, a target must satisfy our 4 M’s:  Money  valuation  currency  Motivation  willing seller  Method  transaction structure  Match  fit (technology, culture, industry, sector, etc.) Target Selection

10. From Sellers Perspective We Provide:  speed  history of successful “win/win” deals  certainty of outcome  cash  continuity of business  pragmatic due diligence review  opportunity for sr. management to exit if they want to (i.e. no handcuffs) Value Proposition

11. From Buyer’s Perspective We Require:  motivated seller  satisfied customer base/proven technology  quick process  access to sr. management & key customers  limited due diligence  confirmation of assumed integration synergies  unrestricted ability to integrate  100% ownership of both the target and IPR  full, frank & early disclosure of “land mines” & “nuances” Requirements

12.  litigation (threatened or actual)  side letters  significant assets not owned by target  restructuring costs too high  unhappy customers / product problems  revenue recognition issues  significant off balance sheet liabilities  lack of adequate due diligence data  target does not record data divisionally or segmented  revenue and/or costs not allocated  data in foreign languages/financial statement presentation  records don’t tie (to each other or to management’s representations)  differed revenue obligations not adequately provided for  powerful union/works council “Land Mines”

13. Dealing with “Land Mines”  “ring-fence” the problem  price adjustment  leave behind with seller  indemnity  condition to close – seller to resolve the problem at no cost to target (seller is often in a better position to do so)  change deal structure to an “asset deal”  “follow the money” – often a barometer for the business

14.  Integration is planned from the beginning  Initial valuation model contains integration cost/savings assumptions  Due diligence includes validation of assumptions  Due diligence also includes integration planning  Integration is executed early and ruthlessly  Plan is complete & ready to execute prior to close  Some execution may be done prior to close  Minimize repeated right-sizing (cut deep and fast once) Key to Success

15.  it’s key for buyers to make their expectation clear to sellers upfront  similarly, buyers should make it clear as to what they can offer to the seller  the earlier “land mines” are revealed so they can be addressed the better - …last minute surprises often lead to worse results for the seller  it’s a small world – reputations are important in the M&A field Summary

16. THANK YOU