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EXHIBIT 99.1
May 20, 2000
Board of Directors
webMethods, Inc.
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Members of the Board:
We understand that Active Software, Inc. ("Active" or the "Company"),
webMethods, Inc. ("webMethods") and Wolf Acquisition, Inc., a wholly owned
subsidiary of webMethods ("Acquisition Sub"), propose to enter into an Agreement
and Plan of Merger, substantially in the form of the draft dated May 20, 2000
(the "Merger Agreement"), which provides, among other things, for the merger
(the "Merger") of Acquisition Sub with and into Active. Pursuant to the Merger,
Active will become a wholly owned subsidiary of the Company and each outstanding
share of common stock, par value $0.001 per share (the "Active Common Stock"),
of Active, other than shares held in treasury or held by webMethods or
Acquisition Sub, shall be converted into the right to receive 0.527 shares (the
"Exchange Ratio") of common stock, par value $0.01 per share, of webMethods (the
"webMethods Common Stock"). The terms and conditions of the Merger are more
fully set forth in the Merger Agreement and certain related documents.
You have asked for our opinion as to whether the Exchange Ratio pursuant to the
Merger Agreement is fair from a financial point of view to webMethods.
For purposes of the opinion set forth herein, we have:
(i) reviewed certain publicly available financial statements and other
information of Active and webMethods, respectively;
(ii) reviewed certain internal financial statements and other financial
and operating data concerning Active and webMethods prepared by
the management of Active and webMethods, respectively;
(iii) reviewed certain financial projections prepared by the management
of Active;
(iv) reviewed certain financial projections prepared by the management
of webMethods;
(v) discussed the past and current operations and financial condition
and the prospects of Active, including information relating to
certain strategic, financial and
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operational benefits anticipated from the Merger, with senior
executives of Active and webMethods;
(vi) discussed the past and current operations and financial condition
and the prospects of webMethods, including information relating to
certain strategic, financial and operational benefits anticipated
from the Merger, with senior executives of webMethods;
(vii) reviewed the pro forma impact of the Merger on webMethods' present
and projected financial performance and other financial ratios;
(viii) reviewed the reported prices and trading activity for the Active
Common Stock and the webMethods Common Stock, respectively;
(ix) compared the financial performance of Active and webMethods and
the prices and trading activity of the Active Common Stock and the
webMethods Common Stock with that of certain other comparable
publicly-traded companies and their securities;
(x) reviewed the financial terms, to the extent publicly available, of
certain comparable acquisition transactions;
(xi) participated in discussions and negotiations among representatives
of Active and webMethods and their financial and legal advisors;
(xii) reviewed the draft Merger Agreement and certain related documents;
and
(xiii) performed such other analyses and considered such other factors as
we have deemed appropriate.
We have assumed and relied upon without independent verification the accuracy
and completeness of the information reviewed by us for the purposes of this
opinion. With respect to the financial projections, including information
relating to certain strategic, financial and operational benefits anticipated
from the Merger, we have assumed that they have been reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
future financial performance of Active and webMethods. We have relied upon the
assessment by the management of Active and webMethods of their ability to retain
key employees of Active We have also relied upon, without independent
verification, the assessment by the management of Active and webMethods of
Active's technologies and products, the timing and risks associated with the
integration of Active with webMethods and the validity of, and risks associated
with, Active's existing and future products and technologies. In addition, we
have assumed that the Merger will be consummated in accordance with the terms
set forth in the Merger Agreement, including, among other things, that the
Merger will be accounted for as a pooling of interests and it will be treated as
a tax-free reorganization pursuant to the Internal Revenue Code of 1986. We have
not made any independent valuation or appraisal of the assets
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or liabilities of Active, nor have we been furnished with any such appraisals.
Our opinion is necessarily based on financial, economic, market and other
conditions as in effect on, and the information made available to us as of, the
date hereof.
We have acted as financial advisor to the Board of Directors of webMethods in
connection with this transaction and will receive a fee for our services. In the
past, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and its affiliates have provided
financial advisory and financing services for webMethods and have received fees
for the rendering of these services.
It is understood that this letter is for the information of the Board of
Directors of webMethods and may not be used for any other purpose without our
prior written consent. In addition, this opinion does not in any manner address
the prices at which webMethods Common Stock will trade at any time or following
consummation of the Merger, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ expresses no opinion or
recommendation as to how the shareholders of Active and webMethods should vote
at their respective shareholders' meetings held in connection with the Merger.
Based on the foregoing, we are of the opinion on the date hereof that the
Exchange Ratio pursuant to the Merger Agreement is fair from a financial point
of view to webMethods.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:
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Managing Director
