UGS Acquires Tecnomatix for $228 Million

Combined company to offer product lifecycle/manufacturing process management solution to customers

Combined company to offer product lifecycle/manufacturing process management solution to customers

Herzlia, ISRAEL — January 4, 2005 — Manufacturing process management (MPM) company Tecnomatix Technologies Ltd. today said that it has entered into a definitive agreement for all of its outstanding equity to be acquired by Plano, Texas-based UGS, a global provider of product lifecycle management (PLM) software and services.

Under the agreement, shareholders will receive $17.00 per share in cash for each Tecnomatix share they own. The transaction implies a total equity value of $227.7 million (based on 12.2 million shares outstanding and assuming exercise of 2.9 million options).

Tecnomatix's founders and other significant shareholders owning approximately 13 percent of the outstanding shares have irrevocably committed to vote in favor of the acquisition. The transaction has received the unanimous support of Tecnomatix's Board of Directors and, subject to the receipt of required regulatory approvals, is expected to be complete by the end of the first quarter 2005.

Jaron Lotan, president and CEO of Tecnomatix said, "UGS is positioned to acquire Tecnomatix after two years of close collaboration. The combination will offer customers an integrated IT solution combining UGS' enterprise capabilities with Tecnomatix's digital manufacturing products and services."

Commenting from UGS, Tony Affuso, chairman, CEO and president of UGS, stated that after having worked closely with Tecnomatix for a number of years, his company is excited to be able to further capitalize on the strengths of both organizations. Given the recent successes of our joint sales initiatives and ongoing product integration efforts, this agreement marks an important extension of our efforts to offer customers solutions to their planning and production issues, Affuso said. We look forward to Tecnomatix employees, with their in-depth knowledge and experience, becoming part of our organization. Following the acquisition, it is UGS' intention to continue to support all existing Tecnomatix customers and solutions."