Unify to Acquire AXS-One for $8 Million

Unify Corp., provider of application development, database and migration products, has entered into a definitive agreement to acquire AXS-One, provider of integrated content archiving software solutions. The acquisition, which is subject to approval by the stockholders of Unify and AXS-One, is expected to close by the end of Unify’s fiscal first quarter, ending July 31, 2009.

Through the agreement, Unify will purchase all outstanding shares and debt of AXS-One in an all-stock transaction valued at approximately $8.0 million, based on Unify’s closing stock price yesterday, subject to certain closing adjustments.

The acquisition is expected to create a more competitive, cost efficient company with a larger customer base, increased maintenance revenues and a significant growth potential. AXS-One’s 2008 revenues were $13.4 million, up 12% over 2007, including approximately 48% recurring maintenance revenue. Based on the expense reductions previously implemented by AXS-One and the further cost savings expected post closing, Unify expects the transaction to be accretive on a non-GAAP basis by the end of its fiscal second quarter, ending October 31, 2009.

AXS-One will become a wholly-owned subsidiary of Unify, benefiting from Unify’s financial stability, operational strength and distribution channel to accelerate its innovation and leadership in the integrated content archiving market as well as in the emerging e-mail migration market.

“The acquisition of AXS-One advances Unify’s growth strategy to acquire superior technology companies that can leverage our technology strengths, extensive customer base and worldwide distribution channel,” said Todd Wille, CEO of Unify. “The acquisition enables the combined company to meet a broader set of customers’ needs, accelerate direct and channel sales, and achieve significant cost synergies, which we expect will increase Unify’s revenue, profitability and stockholder value.”

Bill Lyons, CEO of AXS-One, commented: “This transaction represents a tremendous opportunity for both AXS-One and Unify. Together our companies create a stronger, more profitable, customer-centric organization that can better address growing business opportunities with customers and partners worldwide. By leveraging our combined size, increased efficiencies, and international presence and distribution, we believe we will significantly strengthen our position in the market. Industry analysts are forecasting the e-mail archiving market to grow to $1.7 billion by 2012. With today’s announcement, we believe we are well-positioned for growth.”

AXS-One’s AXS-One Compliance Platform is an integrated content archiving software solution designed to capture, index, archive, search, supervise, manage retention and disposition, and provide legal discovery on all electronic records, including e-mail, instant messages, desktop documents, SharePoint documents, voice, images, reports, and SAP documents and data, for operational efficiency, compliance management and litigation readiness. Additionally, AXS-One offers a migration portfolio which enables customers to choose between messaging platforms, including Microsoft and IBM, complementing Unify’s Composer migration portfolio, which offers application migration options for the mainframe, Java, Microsoft and Oracle environments.

Under the terms of the agreement, which has been unanimously approved by both boards of directors, all AXS-One outstanding common stock and warrants to purchase AXS-One common stock will be converted into 1 million shares of Unify common stock or warrants to purchase shares of Unify common stock; and the convertible notes of AXS-One in the aggregate principal amount of approximately $13 million will be exchanged for approximately 2.1 million shares of Unify common stock, subject to certain closing adjustments. The debt holders may also be issued additional shares of Unify common stock based on the performance of AXS-One’s product revenue over the 12 months after the effective date of the merger. Upon closing, current AXS-One stockholders will own approximately 27%, and current Unify stockholders will own approximately 73%, of the combined company. Certain AXS-One stockholders and certain Unify stockholders have executed agreements obligating them to vote in favor of the merger.