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Tumbleweed Communications Corp. (TMWD) to Merge with Sopra Group Subsidiary for Long-Term Growth

In an effort to offer integrated collaborative business solutions around the world, Sopra Group (Euronext Paris: SOP) and Tumbleweed Communications (Nasdaq: TMWD) today announced a plan to merge in which Sopra Group, through its subsidiary Axway, will acquire all outstanding Tumbleweed stock in cash at $2.70 per share, which will assist the companies in the expansion of their market reach.

“Tumbleweed is a natural fit with Axway. We are confident that the combined product offering will benefit customers from both companies and increase long-term growth prospects,” Jim Scullion, CEO of Tumbleweed stated in the press release.

“The combined entity is expected to more than double Axway’s North American revenue. In addition, our respective customers will have access to a highly attractive set of products, solutions and services,” Fabre said.

Tumbleweed provides secure content delivery solutions to more than 3,300 customers in various industries. Tumbleweed posted revenue of $57 million in 2007. Sopra plans on merging the businesses of Tumbleweed with Axway, which provides collaborative business solutions around the world. Axway reported $218 million in revenue for 2007. Combined, the companies are expected to generate an operating margin between 12 percent and 15 percent and revenues of approximately 362 million.

The proposed transaction is subject to customary closing conditions including regulatory and Tumbleweed stockholder approvals, and is expected to close in the third quarter of 2008. Tumbleweed’s operations will then be combined with those of Axway. Together, Axway and Tumbleweed will offer integrated collaborative business solutions to more than 11,000 customers globally.

The proposed merger has been approved by both Sopra and Tumbleweed’s board of directors, is subject to regulatory approvals and closing conditions, and is expected to close in the third quarter of 2008.

Sopra Group expects to fund the transaction through its existing lines of credit. Given the complementary nature of Axway’s and Tumbleweed’s businesses, Sopra Group expects to recognize synergies through both revenue growth and cost savings.

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