Complementary capabilities

Autonomy has signed a definitive agreement to acquire Verity

in an all-cash transaction valued at approximately $500 million.

The companies say their combined products will provide customers with a wider and deeper set of tools that address the ever-increasing challenge of efficient, precise information access. Further, the companies say, their complementary product capabilities and distribution channels will allow them to better meet the needs of customers worldwide. Existing investments in Verity solutions will be protected through product compatibility with Autonomy's architecture, as well as access to Autonomy's voice and video applications.

Under the terms of the agreement, Verity will be acquired by Autonomy for $13.50 per share. Shareholder directors and executive officers of Autonomy and Verity have agreed to vote the shares they own in favor of the acquisition. The transaction, which requires shareholder approval, is expected to close in late 2005/early 2006 and is subject to customary regulatory closing conditions.

When the transaction is closed, the combined entity will be branded Autonomy and maintain global headquarters in Cambridge, England, while Verity will become the base for U.S. operations. Mike Lynch, Autonomy's group CEO and co-founder, will continue as CEO of the expanded group. Verity CEO Anthony Bettencourt will assume the role of CEO for Autonomy's U.S. division.