webMethods, Inc. announced it has signed a definitive agreement to acquire Active Software, Inc. in an all-stock transaction. This acquisition brings together two vendors whose software solutions address the integration requirements of global companies and industry trading exchanges, both within the enterprise and across B2B trading networks. The companies expect that the transaction will close during the third quarter of 2000, pending completion of customary closing conditions and receipt of Active Software and webMethods stockholder and required government approvals. Under the terms of the agreement, Active Software’s stockholders will receive 0.527 of a share of webMethods common stock in exchange for each share of Active Software common stock. The transaction, valued at approximately $1.3 billion based upon the Friday, May 19, 2000 closing price of webMethods common stock, is expected to be accounted for as a pooling-of-interests. Approximately 13.6 million shares of webMethods stock will be exchanged for all outstanding shares of Active Software. webMethods was advised by Morgan Stanley Dean Witter, and Active Software was advised by Goldman, Sachs & Co. and Thomas Weisel Partners. Until now, companies have been forced to adopt separate solutions for uniting internal business processes, and then sharing and integrating these processes with external trading partners, either directly or via B2B marketplaces and trading exchanges. Upon completion of the acquisition, Active Software’s products and operations will be combined with webMethods. Phillip Merrick will continue in his role as president, CEO and chairman of webMethods, with Jim Green, Active Software’s CEO, joining the team in the role of CTO and executive vice president, product development. Green will also join the webMethods Board of Directors. Other members of the Active Software management team will join the webMethods management team. Active Software’s Santa Clara, Calif. offices will become the West Coast headquarters of webMethods. The combined companies will have nearly 600 employees worldwide. www.webmethods.com, www.activesw.com

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