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Linedata Services makes offer for Financial Models Company

The new group will rank among the three leading IT companies worldwide in Asset Management if the bid is successfull.

Today, Linedata Services announced a bid for FMC (Financial Models Company) in Canada, one of the main providers of ASP solutions for the international financial community.

Linedata Services is offering to purchase 100% of existing FMC shares. The offer, of about CAD 154 million, will involve a cash and share settlement, with 70% of the consideration being made in cash and 30% in Linedata Services shares issued and exchanged for FMC shares at the ratio of one new Linedata Services share for 1.97 FMC shares. If all of FMC's share capital is included in the offer, a maximum of 1,669,509 new Linedata Services will be issued.In addition, a maximum of 130,000 new shares could be created if option holders exercise their rights. According to the terms of the offer, the issue price of one new Linedata Services share is EUR 16, including the issuance premium. The majority of Board of Directors of FMC has recommended the Linedata offer, with the exception of Mr Katotakis, CEO of FMC.

In addition to the approval of the Canadian market authorities, the bid is subject to certain terms, especially as Mr Katotakis has until December 29, 2004 to exercise a pre-emption right.

Linedata Services will take up the offer if at least the majority of FMC shares are tendered. The transaction is scheduled for completion by the end of January 2005.

Strengthening the ASP business model

In 2003, FMC generated revenues of CAD 72.4 million, with a geographical breakdown of 75% in North America and 25% in Europe, and has a net cash position of over CAD 30 million. Nearly 80% of its revenues are recurring, including 61% in ASP, consistent with Linedata Services’ business model. FMC is listed on the Toronto Stock Exchange and has 370 employees who serve over 200 international clients.

A strategic acquisition plan: the making of a worldwide leader in Asset Management

FMC offers an extremely wide range of Asset Management IT solutions with software applications that perfectly complement those offered by Linedata Services, both geographically and functionally.

In terms of back office solutions, Linedata Services would gain strength in major financial markets, thus allowing the Group to develop its presence in the United States, become the top player in Canada and consolidate its leading position in the United Kingdom.

FMC will also afford Linedata Services solid expertise in systems for both the middle office, with a leading global performance measurement and attribution solution, and front office functionality, with a leading portfolio modeling solution.

According to Anvaraly Jiva, CEO and Chairman and of the Executive Board of Linedata Services, "This acquisition project presents strong synergies for Linedata. In terms of functionality, FMC is a perfect complement to the Linedata Services range with its modern, high?performance solutions. This merger would notably allow us to position ourselves as a major player in North America. Lastly, the new group would rank among the three leading IT companies worldwide in the Asset Management business, in line with the primary target of our strategy for 2003-2006. This is why I am very encouraged by the continuous support of FMC’s Board."

"This merger gives us a genuine opportunity to benefit from Linedata Services' strong presence in Europe and the United States in order to step up the deployment of our solutions. Linedata Services' strong ASP culture, similar to ours, and the technological compatibility of our solutions provide the necessary leverage to gain market share across all our businesses," states John Vivash, Chairman of the Board of FMC.

In conclusion, if this major acquisition is successful, Linedata Services would:

· now have two major Asset Management poles with equal weight in North America and Europe in terms of revenues;
· increase the proportion of ASP revenues in overall revenues, in line with the Group's strategy;
· strengthen our suite of Best-of Breed systems spanning the front office, middle office and back office;
· complete Linedata Services’ portfolio of 350 clients with 200 new international clients;
· generate total 2003 pro-forma revenues of about EUR 150 million to meet the targets announced for the two years to come.