Phone.com to Acquire Paragon Software

In a move to enable WAP-based synchronization of personal information, Phone.com Inc. (Redwood City, CA) has signed a definitive agreement to acquire Paragon Software Ltd. (Newbury, UK) for approximately $500 million in stock. Paragon Software's product, FoneSync, enables users of PC and Internet-based personal organizers such as Microsoft Outlook, Lotus Notes, Excite@Home, and Yahoo to download and synchronize contact information to more than 240 digital mobile phones from 20 major manufacturers including, Alcatel, Ericsson, Nokia, Panasonic, Philips, Samsung, Sanyo, Siemens, and Sony. Phone.com plans to integrate the synchronization technology into its UP.Link server suite and browser.

"With the acquisition of Paragon Software, we add significant new value to our WAP platform by leveraging the power of data synchronization," said Alain Rossmann, chairman and CEO of Phone.com. "Mobile phone users are demanding touch-of-a-button information management between the mobile phone, PC applications, and Internet information services, whether or not they are on-line. The combination of Paragon Software and Phone.com will rapidly drive this technology to market."

Paragon Software already has marketing agreements in place with numerous partners including Nokia, Ericsson, AT&T Wireless, Microsoft, and Lotus, said Colin Calder, CEO of Paragon Software Ltd.

In connection with the acquisition, Paragon Software's shareholders will receive approximately 3.6 million shares of Phone.com common stock, and cash payments totaling $7.5 million. The stock-for-stock transaction will be accounted for using purchase accounting and closing is anticipated to occur in the first calendar quarter of 2000. The acquisition is subject to customary closing conditions. Integration of the two companies and their products is expected to occur rapidly. Paragon Software's 63 employees will be integrated into Phone.com's engineering, marketing, and sales organizations.

Edited by Ellen Jensen