Rational Software Announces Agreement to Acquire Pure Atria

Apr 09, 1997, 01:00 ET from Pure Atria Corp.

    SANTA CLARA, Calif., April 7 /PRNewswire/ -- Rational Software Corporation
 (Nasdaq:   RATL) announced today that it has entered into a definitive agreement
 to acquire Pure Atria Corporation (Nasdaq:   PASW) to create a leading software
 company, operating worldwide, whose products automate the component-based
 development of software applications.
     Under the terms of the acquisition agreement, all of the outstanding
 shares of Pure Atria common stock will be exchanged for shares of Rational on
 the basis of 0.90 shares of Rational stock for each share of Pure Atria stock.
 Outstanding options to purchase Pure Atria stock will be converted at the
 exchange ratio into Rational options.  The transaction is expected to be
 accounted for as a pooling of interests and to qualify as a tax-free
 reorganization.  Rational expects to recognize a one-time charge related to
 certain merger costs and related expenses in the second quarter of its fiscal
     "Rational's mission is to enable our customers to automate the
 component-based development of software.  Rational and Pure Atria share a
 common vision and are committed to providing best-in-class products to our
 customers.  By quickly integrating the Pure Atria sales operation into the
 Rational field sales operation and quickly integrating the industry-leading
 Pure Atria and Rational products in the context of Rational's proven business
 model, we are creating in Rational a partner that customers around the world
 can depend on," said Paul Levy, a Rational founder, chairman, and chief
 executive officer of Rational.
     Reed Hastings, a founder, president, and chief executive officer of Pure
 Atria, stated, "This combination takes advantage of Rational's world-class
 field sales organization and disciplined management style to accelerate the
 combined company's drive to become a world-leading software business.
 Combining with Rational reinforces Pure Atria's founding vision, which is to
 automate software development while leveraging Pure Atria's superb product
 portfolio and providing an expanding array of opportunities for the
 tremendously capable members of the Pure Atria team."
     Michael T. Devlin, a Rational founder and the company's president, said,
 "By quickly integrating the industry-leading Pure Atria and Rational products,
 we will be providing the most complete solution for automating the
 component-based development of software applications available today.  The
 combined company's product line will address the needs of customers who are
 demanding complete solutions covering all of the critical aspects of
 developing business critical software applications for Windows, the Web, and
     The board members and officers of Pure Atria will agree to vote their
 shares in favor of the acquisition.  Furthermore, Pure Atria and Rational have
 granted reciprocal options to purchase newly issued shares equal to
 approximately 19.9 percent of each of the issuing company's currently
 outstanding shares, which are exercisable upon certain events.  Completion of
 the transaction is subject to customary conditions, including approval by the
 stockholders of Rational and Pure Atria and Hart-Scott-Rodino review.  The
 merger is expected to close in the third quarter of calendar 1997.
     Paul D. Levy, a founder, will continue as Rational's chairman and chief
 executive officer and Michael T. Devlin, a founder, will continue as
 Rational's president.  Robert T. Bond, a thirteen-year veteran with Rational,
 will continue as the company's chief operating and financial officer.  Upon
 completion of the merger, Reed Hastings, a founder, president, and chief
 executive officer of Pure Atria, will become Rational's chief technical
 officer.  Pure Atria's principal lines of business, which focus on automating
 software quality and test and software configuration management, will become
 new Rational business units within Rational's Products Group.  The Pure Atria
 sales and services operation will be integrated into Rational's worldwide
 field sales operation to form a single, unified sales force managed by
 Rational's senior vice president for worldwide field operations, John Lovitt,
 a twelve-year veteran with the company.  Rational's board of directors will
 continue in place following completion of the acquisition.
     About Rational Software Corporation
     Rational Software Corporation develops, markets, and supports a
 comprehensive solution that automates the component-based development of
 software.  Rational's solution includes an integrated family of products that
 automate development and quality assurance throughout the software lifecycle,
 a software process that can be configured to the specific needs of customers,
 and a range of consulting and support services.  For more information on
 Rational's products and services, visit Rational's Web site at
     The forward looking statements contained in this news release, which
 reflect management's best judgment based on factors currently known, involve
 risks and uncertainties, including the potential inability to complete the
 described transactions as scheduled, or at all, risks involving the ability to
 successfully integrate Rational and Pure Atria, the ability to successfully
 develop new products, market acceptance of existing and new products of the
 combined companies, the continued success of the Microsoft and UNIX operating
 systems, variances between actual and estimated costs and expenses related to
 the proposed merger, the potential for fluctuations in quarterly operating
 results, rapid technological change, and intense competition from current and
 potential competitors who may be able to respond more quickly to new or
 emerging technologies and changes in customer requirements.  Actual results
 may differ materially.
     NOTE:  The word "Rational" and Rational's products are trademarks of
 Rational Software Corporation.  References to other companies and their
 products use trademarks owned by the respective companies and are for
 reference purposes only.
     For more information contact:  Rational Software Corporation, 2800 San
 Tomas Expressway, Santa Clara, CA 95051-0951, Tel. 408-496-3600 or
 800 RAT-1212, Fax 408-496-3636, Fax-on-demand 408-496-3966, E-mail
 info@rational.com, Web www.rational.com

SOURCE Pure Atria Corp.