Global Press Releases

Software AG Acquires SPL Software of Israel

Darmstadt, Germany, Wednesday, March 21, 2007

Software AG today announced a direct presence in Israel with the acquisition of an 80% share in its distributor SPL Software as of April 1st, 2007. The fully cash transaction has a value of $61.6 million (€46.3 million). SPL Software, currently wholly owned by Silverboim, has been a Software AG distributor for 30 years and has a well established reputation in delivering high performance business solutions in banking, insurance and utilities as well as the public sector. Silverboim continues to hold 20% of SPL Software allowing the company to continue to utilize its extensive institutional contacts. This acquisition is a further step in Software AG’s strategy of expanding its direct market presence to better deliver customer specific Service-Oriented Architecture (SOA) solutions. It follows recent expansion in Latin America, Japan and South Africa.

“Achieving a controlling interest in a strong, stable and profitable company such as SPL Software is an attractive opportunity for Software AG”, said Software AG CEO Karl-Heinz Streibich, “It enables us to establish direct customer relationships, extend our business and utilize the experience and contacts of the existing management team. Strong customer relationships form the basis of our Service-Oriented Architecture (SOA) approach to Legacy Modernization and Business Integration, in addition to our unique software development capabilities”.

SPL Software has been operating in Israel for 30 years as Software AG‘s exclusive representative. Based on Software AG’s state of the art software infrastructure technology, including the Aadabas 2006 database software, the Natural 2006 developer’s programming language, and the SOA Crossvision Suite, SPL has developed advanced technology-based business solutions for its clients. SPL’s solutions are deployed in Israel’s leading organizations, including banks, insurance companies, telecommunications service providers, industrial concerns and government offices.  Altogether more than 80 organizations rely on Software AG products or SPL services.

“The transfer of the controlling interest to a leading international company like Software AG will take SPL to a global level.” said Zvi Barinboim of Silverboim, “We have had a long and fruitful relationship and with our combined capabilities I look forward to growing our business further. 

SPL Software currently has around 300 employees and accounted revenue of the equivalent of €28 million in 2006. Of this, more than 40% was product revenue and close to 60% from customized software solutions and services. SPL recently focused on the Financial Services sector which is expected to return strong growth in 2007. SPL Software’s customers include Bank Leumi, Bank Hepialid, Migdal Insurance of the Generally Group and Bank Mizrahi Tfachot.

Software AG recently announced a major expansion program with the goal of more than doubling revenue to €1 billion by 2011. The acquisition of SPL Software is a further step in implementing this expansion program and is expected to add €20 million revenue in 2007 with full support of Software AG’s margin target of 24% (EBIT). The forecasted growth in revenue for 2007 is raised from 10% to 14%. The Earnings per Share (EPS) impact will be around €0.10 cents per share pushing the target EPS to a range of €3.00 to €3.20 in 2007.

About Software AG

Software technology to increase the value of enterprise IT systems
Software AG is a global leader in mission-critical software infrastructure solutions based on open standards. At the forefront of advanced Service-Oriented Architecture (SOA), Software AG enables customers to create powerful enterprise applications – especially in heterogeneous IT environments. Software AG’s products Adabas, Crossvision, Natural and Tamino help more than 3,000 customers uncover the full potential of their IT and add value to existing systems. With technology from Software AG, enterprises can: create flexible business applications and processes; extend the value and life of core systems; manage data effectively across the enterprise; and control and govern their Service-Oriented Architecture.  

Software AG has more than 35 years of global IT experience and over 2,600 employees serving customers in 70 countries. The company is headquartered in Germany and listed on the Frankfurt Stock Exchange (TecDAX, ISIN DE 0003304002 / SOW). Software AG posted total revenues of €483 million in 2006.

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