On May 23, EDS announced its intention to offer to buy the publicly held minority interest of UGS. The UGS board of directors appointed a special committee of independent directors to evaluate the terms of EDS’ offer on behalf of the minority shareholders. The special committee has determined that the price of $32.50 per share is fair to the minority public shareholders and has recommended that UGS shareholders tender their shares pursuant to EDS’ offer.

EDS currently owns approximately 86 percent of the outstanding common shares of UGS, and public shareholders own the remaining 14 percent.

Previously, EDS had announced an agreement to purchase Structural Dynamics Research Corp. (SDRC) for approximately $950 million in cash, or $25.00 per share. Upon closing, UGS and SDRC will be combined under the UGS name to create an industry leader in the Product Lifecycle Management (PLM) market, with more than $1 billion in annual revenues.

EDS is pleased to have reached this agreement with the UGS special committee and board, said Paul Chiapparone, EDS executive vice president of operations and chairman of UGS. The combination of the UGS and SDRC businesses gives EDS substantial software capability in a rapidly emerging market with significant ‘pull-through’ revenue opportunities for services from our other four lines of business. Completion of these two transactions will enable EDS to continue executing on its strategy to be the leader in the digitized PLM market.

The transaction will be structured as a cash tender offer for all of the approximately 5.3 million outstanding Class A common shares of UGS. Following completion of the tender offer, EDS will acquire any remaining publicly held shares of UGS through a merger transaction. EDS expects the closing of the UGS and SDRC transactions to occur in the third quarter of 2001.

We are quite pleased that this important step has been successfully concluded, said Tony Affuso, UGS president and CEO. This marks a significant milestone as we join forces with EDS and SDRC to a create a customer-driven organization with an unmatched capability to enhance the product lifecycle and create value for our customers.

SOURCE: COMPANY PRESS RELEASE