Bedford, Massachusetts and Cambridge, EnglandâApril 6, 2005â Progress Software Corporation (PSC) (Nasdaq: PRGS), a supplier of leading technology to develop, deploy, integrate and manage business applications and Apama, Inc., today jointly announced that PSC has acquired privately-held Apama in an all-cash transaction for a purchase price of approximately $25 million, net of cash acquired. Apama is the leading provider of ground-breaking Event Stream Processing (ESP) technology with a significant presence in the financial services industry. Apama now becomes part of PSC operating unit ObjectStore, which provides real-time data infrastructure for the enterprise and whose products will be integrated with the Apama offerings.
Apama offers the first, most comprehensive Event Stream Processing system Apama, founded in 1999, is the first company to enable a new class of event-driven applications that allow business decisions to be made in real-time, as events occur. Traditional software has been forced to respond to the world "after the fact"âafter real world events have occurred. Apama technology advances make it possible for businesses to monitor events, analyse them, and take action in milliseconds. ESP already is deployed by major financial institutions in the highly lucrative field of algorithmic trading, and other organisations are beginning to realise the value of this breakthrough technology. Any environment in which operational efficiencies or competitive advantages can be gained from real-time response to real-time event data represents an opportunity for Apama and its ESP platform. Non-financial examples include RFID-enabled supply chain, manufacturing and retail operations; sensor-controlled environments in industrial and utility plants, and telemetry signal data management in defense and aerospace.
The Apama product family includes the ApamaÂ® Event Managerâ¢, a high-performance, scalable processing engine that can process thousands of events per second, executing tens of thousands of concurrent event strategies that can identify business conditions within the event streams. Examples include identification of trading opportunities from the relationship between the price discrepancies of two stocks, or discerning fraudulent behavior from a stream of credit card transactions. Apama expresses time-dependent event logic in an event programming language (EPL) or in Javaâ¢. The Apama Event Modelerâ¢ provides a graphical environment for composition, deployment and management of event processing strategies. With Event Modeler, these sophisticated event processing strategies can be rapidly composed with a business-focused drag-and-drop interface. In addition, stand-alone Web-based dashboards, used for real-time management of event processing strategies, can automatically be generated and deployed. For connectivity, the Apama Integration Adapter Framework (IAF) provides connectivity to databases and event stream data feeds, and includes pre-packaged adapters for enterprise middleware, such as an enterprise service bus (ESB) or databases, as well as specific adapters for financial data providers, such as Reuters and financial interchange (FIX). Apama also includes a unique framework that enables users to create their own reusable event processing modules, SmartBlocksâ¢, to implement, for example, the unique analytics used in a series of algorithmic trading strategies by a hedge fund or bank.
"Since we founded Apama, we have developed the most complete and widely deployed event stream processing product in the industry," said John Bates, co-founder and CTO of Apama. "Recently some vendors have claimed to be the âfirstâ stream processing engine available. Not only do we own that distinction, but we also have the most comprehensive product in the industry today."
"Our customers have told us that developing ESP applications feels like breaking a new computing barrier, just as it must have felt when relational databases broke through 20 years ago, "said Mark Palmer, vice president of the ObjectStore Event Processing line of business. "They indicate that over the next 10 years there will be as many ESP applications as there are standard OLTP applications. We agree, and plan to rapidly expand Apamaâs lead position as the dominant platform in the emerging class of ESP applications and services."
Only Apama makes building ESP applications accessible to business users Apama uniquely simplifies the job of building event-driven business applications. Through its intuitive, visual development environment, business application developers can quickly create and modify event processing logic. Other ESP systems require development projects to have the support of large IT staffs, large budgets, and lengthy project schedules. In contrast, Apama-based applications can be created in days and modified in minutes.
"Progress is well known for its proven ability to simplify the job of building business applications," said Peter Sliwkowski, president of the ObjectStore division of Progress Software. "Now we are bringing this expertise to the new realm of Event Stream Processing applications. The combination of rapid application development, performance, scalability and flexibility gives customers a significant competitive edge in the real-time enterprise."
Apama is the most broadly deployed ESP product in the industry World leading institutions including JPMorgan Chase have deployed Apama as a critical ESP element of their electronic trading systems.
Progress and Apama combine for unrivalled ESP Platform Progress is an industry leader in data caching and data management infrastructure for real-time data processing. ObjectStoreÂ® Event Engineâ¢, a high-performance streaming event database, will be integrated with Apama to provide historical event data management, fault tolerance and historical event replay. ObjectStore EdgeXtendÂ® provides low-latency data caching and object-to-relational mapping to relational databases and is used to deliver external reference data to the event processing engine without degrading performance. In addition, Sonic Software, another Progress Software operating unit, provides Sonic ESBÂ®, the industryâs leading enterprise service bus (ESB), which can integrate Progress ESP applications and services to the rest of the enterprise.
"As our customers expand their deployments, very high performance data management and integration are key issues. Progress brings essential elements that our customers have been asking for. Itâs an extraordinary synergy," said Peter Beard, CEO of Apama.
Apama management team assumes strategic roles at PSC As part of this transaction, Apamaâs CTO and co-founder, Dr. John Bates, will expand his role to become vice president of event processing products within PSCâs ObjectStore division. Dr. Giles Nelson, co-founder of Apama, assumes the role of director of business development for ObjectStoreâs event processing products. Bates and Nelson are well-known industry experts on the topic of event processing.
Peter Beard, CEO of Apama, assumes responsibility for ObjectStoreâs global field operations. Beard is a 20-year veteran of the software industry. Prior to joining Apama, Beard served as CEO of Whitelight Systems, a vendor of real-time analytics targeting the financial services sector. Previously Beard was vice president Europe, Middle East and Africa for business intelligence vendor Cognos. Andy Menzies, Apamaâs vice president of sales, assumes the role of vice president of global financial services for ObjectStore. Menzies brings broad experience in software infrastructure sales, having previously served in senior sales roles at SAP, Siebel, Cognos and Business Objects.
About the transaction
The acquisition was unanimously approved by the boards of directors of both PSC and Apama and closed immediately after execution of the merger agreement. PSC anticipates revenue related to the acquisition to be in the range of between $2 million and $3 million for the balance of fiscal
2005 and the effect on pro forma operating income, which excludes in-process research and development, retention payments and amortization of acquired intangibles, to be neutral.
In connection with the acquisition, PSC is granting inducement stock options to purchase an aggregate of 135,000 shares of PSC common stock.
The grants are being made to 16 Apama (UK) Limited employees who are joining PSC as a result of the acquisition. The grants are being made under PSC's 2004 Inducement Stock Plan. Each option has a term of seven years and an exercise price equal to the closing price of the common stock on the date of grant. In general, the options vest in equal monthly increments over 60 months beginning on the first day of the month following the date of grant, and are generally non-transferable without PSCâs approval. In addition, PSC is implementing an employee retention program by which payments will be made over the next twelve months to Apama employees, if they meet certain employment criteria. If all retention criteria are met, PSC will be obligated to pay a total of $4.0 million in retention payments.