Pegasystems to Acquire Chordiant Software

CAMBRIDGE, MA and CUPERTINO, CA--(Marketwire - March 15, 2010) - Pegasystems Inc., (NASDAQ: PEGA), the
leader in business process management (BPM) software solutions, and Chordiant Software, Inc.(NASDAQ: CHRD), a leading provider of customer relationship management (CRM)
software and services, today announced they have entered into a definitive
agreement for Pegasystems to acquire Chordiant.



Under the terms of the agreement, Pegasystems will make a cash tender offer
of $5.00 per share for all outstanding shares of Chordiant common stock for
a total purchase price of up to approximately $161.5 million, assuming all
outstanding shares are tendered. Upon satisfaction of the conditions to the
tender offer and after such time as all shares tendered in the tender offer
are accepted for payment, the agreement provides for the parties to effect,
subject to customary conditions, a merger to be completed following the
completion of the tender offer which would result in all shares not
tendered in the tender offer being converted into the right to receive
$5.00 per share in cash. The transaction is subject to customary closing
conditions, including regulatory approvals, and is expected to close in the
second calendar quarter of 2010. Chordiant reported revenue of $76.3
million and $52.3 million of cash and investments for its four quarters
ended December 31, 2009. The boards of directors of both Pegasystems and
Chordiant unanimously approved the definitive agreement.



Pegasystems' commitment to innovation and customer success has resulted in
ten consecutive quarters of record revenue. Its industry-leading Build for
Change(R) technology is both fueling widespread BPM adoption and being
widely embraced to improve customer experience. Chordiant's predictive
decision management solutions are renowned for delivering increased
customer lifetime value to their clients.



The combined company's expanded global customer base, including many of the
world's largest organizations, can now take advantage of these
complementary solutions. Chordiant clients will be able to incorporate
Pegasystems intent-driven process automation to enhance customer experience
in their existing foundation and marketing solutions. Pegasystems' clients
can take advantage of Chordiant's predictive decision management solutions,
extensive CRM assets, and expertise in customer experience.



Many of the leading global systems integrators, who are part of
Pegasystems' growing alliance program, have also built practices around
Chordiant software. The combination of the two companies would enable an
expanded partner network to enhance their practices and realize incremental
growth.



"This combination creates a broader portfolio which will offer an expanded
client base new capabilities to meet next-generation CRM needs," said Alan
Trefler, Founder and CEO of Pegasystems. "We are excited to add Chordiant's
technology and domain expertise to bolster our previously announced
investment plans in BPM and CRM."



"We expect this acquisition to be accretive, but under the new purchase
accounting rules, transactional costs are now expensed rather than included
in the calculation of goodwill," said Craig Dynes, CFO for Pegasystems.
"Accordingly, significant closing costs, integration expenses and other
purchase accounting valuation charges will be dilutive to GAAP reported
earnings. However, on a non GAAP basis, excluding these one-time charges
and the reduction in maintenance and other revenues that are currently
recorded as deferred revenue on Chordiant's balance sheet, we expect this
transaction to be accretive by as much as $0.03 to Pegasystems' 2010
earnings per share and by as much as $0.20 to Pegasystems' 2011 earnings
per share. Pegasystems has not yet provided guidance on 2011 earnings. We
anticipate providing revised guidance giving effect to these purchase
accounting adjustments as the closing of this transaction approaches."



"We are excited to bring Pegasystems' industry-leading Build for Change
technology to help our clients further optimize customer experience,"
commented Steven Springsteel, Chairman, President and CEO of Chordiant
Software. "We expect that our customer base will welcome this news, and can
look forward to the increased innovation that Pegasystems is known for,
along with the many other benefits resulting from the mutual strengths and
combined scale of our companies."



Bridge Street Advisory Services, a division of Financial Telesis Inc., is
acting as financial advisor to Pegasystems, and Wilson Sonsini Goodrich &
Rosati P.C., is acting as legal advisor to Pegasystems. Morgan Stanley &
Co. Incorporated is acting as financial advisor to the Board of Chordiant,
and Cooley Godward Kronish LLP is acting as legal advisor to Chordiant.



Pegasystems and Chordiant will be hosting a conference call and live Webcast
associated with this announcement at 9:00 a.m. ET on March 15, 2010.
Dial-in information is as follows: (877) 348-9349 (domestic) or (678)
809-1406 (international).



To listen to the Webcast,
log onto www.pega.com at least 5 minutes prior to the event's broadcast and
click on the Webcast icon in the Investor
Relations section. A replay of the call will also be available on
www.pega.com in the Investor Relations section Audio Archives link.



Safe Harbor Statement: This press release contains forward-looking
statements that involve risks and uncertainties, including statements
regarding completion of the acquisition; the impact of the acquisition on
Pegasystems' earnings per share, business performance and product
offerings; and the impact of the combined product capabilities. Factors
that could cause actual results to differ materially include the following:
costs related to the proposed acquisition; the risk of failing to obtain
any regulatory approvals or satisfy other conditions to the acquisition;
the risk that the transaction will not close or that closing will be
delayed; the risk that our respective businesses will suffer due to
uncertainty related to the transaction; difficulties encountered in
integrating merged businesses; whether certain market segments grow as
anticipated; the competitive environment in the software industry and
competitive responses to the acquisition; and whether the companies can
successfully develop new products or modify existing products and the
degree to which these gain market acceptance. Further information on
potential factors that could affect our respective businesses and financial
results are included Pegasystems' and Chordiant's filings with the
Securities and Exchange Commission, including Pegasystems' report on Form
10-K for the year ended December 31, 2009 and Chordiant's report on Form
10-K for the year ended September 30, 2009, and Form 10-Q for the quarter
ended December 31, 2009, respectively, which are on file with the
Securities and Exchange Commission. There can be no assurance that the
acquisition or any other transaction will be consummated.



Additional Information: The tender offer has not yet commenced. This
press release is for informational purposes only and is not an offer to buy
or the solicitation of an offer to sell any securities. The tender offer
will be made only pursuant to an offer to purchase and related materials
that Pegasystems and its wholly-owned subsidiary intend to file with the
Securities and Exchange Commission. Chordiant also intends to file a
solicitation/recommendation statement on Schedule 14D-9 with respect to the
tender offer. Chordiant stockholders and other investors should read these
materials carefully when they are filed because they contain important
information, including the terms and conditions of the tender
offer. Chordiant stockholders and other investors will be able to obtain
copies of these materials without charge from the Securities and Exchange
Commission through its website at www.sec.gov, from Pegasystems (with
respect to documents filed by Pegasystems with the Securities and Exchange
Commission), or from Chordiant (with respect to documents filed by
Chordiant with the Securities and Exchange Commission). Chordiant
stockholders and other investors are urged to read carefully those
materials prior to making any decisions with respect to the tender offer.



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About Chordiant Software, Inc.
Chordiant Software optimizes the customer experience to help global brands
multiply customer lifetime value. Chordiant arms marketing, customer
service and customer loyalty executives with a suite of intelligent
conversation management applications to deliver an order of magnitude
improvement in customer experience. By maximizing the value of every
conversation across all channels, Chordiant enables today's fast-paced
brands to engage more effectively with customers and quickly measure
whether business strategies are succeeding, resulting in faster
acquisition, improved competitiveness, less churn, and superior customer
service. For more information please visit www.chordiant.com.



About Pegasystems
Pegasystems, the leader in Business Process Management, provides software
to drive revenue growth, productivity and agility for the world's most
sophisticated organizations. Customers use our award-winning SmartBPM(R)
suite to improve customer service, reach new markets and boost operational
effectiveness.



Our patented SmartBPM technology makes enterprise applications easy to
build and change by directly capturing business objectives and eliminating
manual programming. SmartBPM unifies business rules and processes into
composite applications that leverage existing systems -- empowering
businesspeople and IT staff to Build for Change(R), deliver value quickly
and outperform their competitors.



Pegasystems' suite is complemented by best-practice frameworks designed for
leaders in financial services, insurance, healthcare, government, life
sciences, communications, manufacturing and other industries.



Headquartered in Cambridge, MA, Pegasystems has offices in North America,
Europe and Asia. Visit us at www.pega.com.



All trademarks are the property of their respective owners.