Dassault Systemes signs definitive agreement to acquire SolidWorks

Leaders in the Two Major CAD/CAM Market Segments Join Forces

SURESNES, France, and CONCORD, Massachusetts, June 24, 1997 – Dassault Systèmes S.A. (Nasdaq:DASTY) and SolidWorks Corporation today announced the signing of a definitive agreement whereby the privately-held SolidWorks will be acquired by Dassault Systèmes in a stock transaction. Dassault Systèmes provides process-centric solutions for major industrial customers and suppliers through its CATIA-CADAM and VPM product lines, which are successfully marketed, distributed and supported worldwide by IBM. Through this unique strategic partnership with IBM, Dassault Systèmes is a leader in the worldwide CAD/CAM/CAE/PDM-II software market. SolidWorks, a pioneer in developing mechanical design software products for Windows, is a leading provider of cost-effective, easy-to-use production solid modeling solutions for the mainstream design-centric market. Together, Dassault Systèmes and SolidWorks will offer dedicated solutions for both market segments, thus meeting the needs of customers at all levels of product and process complexity.

The agreement calls for Dassault Systèmes to issue 4.85 million shares of common stock in exchange for 100% of the outstanding capital stock of SolidWorks and all the shares issuable upon future exercise of outstanding options and warrants of SolidWorks. Based on yesterday’s closing price of the Dassault Systèmes common stock, the transaction is valued at approximately $310 million. Subject to regulatory and shareholder approvals as well as other customary conditions to closing, the acquisition is expected to be completed in the 1997 third quarter. It is expected that the acquisition will be accounted for as a pooling of interests.

SolidWorks, founded in 1993, develops and markets 3D mechanical design solutions for the Windows platform. The company created the first Windows-native mechanical design system, bringing the power of production solid modeling to the engineer’s desktop. SolidWorks has offices worldwide and distributes its products in 43 countries through a network of over 150 authorized value-added resellers and systems integrators. After only six quarters of product shipment, SolidWorks has over 6,000 installed seats serving over 3,000 customers. Based on the company’s expected results for the quarter ending June 30, 1997, SolidWorks’ annualized revenues would be approximately $25 million.

Upon completion of the transaction, SolidWorks will operate as a separate subsidiary of Dassault Systèmes, maintaining its own identity, products, distribution channel and partner programs. Its operations will be led by the current SolidWorks management team, headed by Mr. Jon Hirschtick, who will report to Mr. Bernard Charlès. The company will continue to be based in Concord, Massachusetts.

Mr. Bernard Charlès, President of Dassault Systèmes, commented, "With the SolidWorks acquisition, Dassault Systèmes clearly demonstrates its innovative and open approach to reach new markets and provide value to our customers in every single segment of the manufacturing industry. Our vision and strategy is to make 3D design affordable to all existing 2D CAD users and future PC users. SolidWorks’ desktop solution, motivated employee team and focused distribution channel will give Dassault Systèmes a leadership position in the mainstream design-centric segment. This is a market with significant growth potential, based on the increasing demand of mainstream engineers for production-level solid modeling capabilities combining ease-of-use and affordability." He added, "Dassault Systèmes will pursue, in continued partnership with IBM, its ongoing strategic initiative to deliver scalable process-centric solutions on UNIX, Windows NT and Network Computing environments. Together, Dassault Systèmes and SolidWorks will be better able to provide customers with a complete set of mainstream design-centric and process-centric solutions."

Mr. Thibault de Tersant, Dassault Systèmes’ Executive Vice President, Finance and Administration, added, "We expect the transaction to be less than 5% dilutive to earnings in the second half of 1997, and to be non-dilutive in 1998. We further expect that it will be a significant contributor to earnings growth thereafter."

Mr. Jon Hirschtick, SolidWorks’ Founder and Chief Executive Officer, stated, "The members of the SolidWorks team are excited about continuing our successful growth in combination with Dassault Systèmes. Our companies share a common vision of the direction of the industry, which is moving toward segmentation into two distinct markets: process-centric and mainstream design-centric. This strategic combination will result in a company with strong leadership positions in both markets. The credibility and endorsement of Dassault Systèmes will benefit our customers by accelerating the worldwide deployment of SolidWorks97 in the mainstream design-centric market."

Mr. Charles Edelstenne, Dassault Systèmes' Chairman and Chief Executive Officer, summarizing the combination, stated, "With SolidWorks, CATIA-CADAM Solutions and VPM product lines, Dassault Systèmes is building a comprehensive product and technology portfolio that will expand its reach to satisfy new customers. Thereby, Dassault Systèmes continues to demonstrate its long-term commitment to growth and enhancement of shareholder value."

This release contains forward-looking statements, including, without limitation, statements about future SolidWorks financial performance and the effects of the proposed acquisition on Dassault Systèmes financial performance. These statements are subject to risks and uncertainties, including risks related to: (i) competition; (ii) new developments in technology, which may adversely affect the markets for Dassault Systèmes or SolidWorks products; (iii) variability of future operating results of Dassault Systèmes, SolidWorks, or the combined companies following the proposed acquisition; (iv) failure of the proposed acquisition to close or, if closed, to achieve the desired synergies and efficiencies; and (v) risks associated with the reaction to the proposed acquisition of employees, customers, distributors and others who affect the businesses of Dassault Systèmes and/or SolidWorks.