Telelogic, the world leader acquires Verilog, the first runner-up

Telelogic, the world leader acquires Verilog, the first runner-up Acquisition will make Telelogic the largest company in the real-time mar- ket MALMÖ/PARIS, 22 December, 1999 - Telelogic today announced the acquisition of the French software company Verilog, wholly owned by CS Communication et Systèmes. "We are changing the playing field dramatically," says Anders Lidbeck, CEO and President at Telelogic. "We are strengthening our leading posi- tion in the communication market and will be the largest company in the real-time market. Telelogic's products are of world class and we are now speeding up the development of the next generation of development tools even further." "Telelogic and Verilog both have a long tradition with SDL and a common technology view," says Yazid Sabeg, chairman of CS Group. "Verilog's products complement Telelogic's and the products will work well together. We chose Telelogic since we believe in the company's potential and view them as the strongest player. We also want to take part in this venture as a shareholder." Strengthened market position Telelogic will, by joining forces with Verilog, create the largest and most dominant player in the communication industry with a market share of more than 50%. Telelogic will also be the dominant player in other indus- try segments such as automotive and aerospace with a market share of 32%. Verilog's customers create new possibilities in two vertical segments - automotive and aerospace. Increased sales force - double capacity in the US Telelogic will multiply its sales force in France and double it in the US. Also in Germany the sales power will be strengthened. Increased focus on product development With the acquisition, the market for SDL based development tools will be consolidated. "Right now the dominating languages for real-time develop- ment and administrative systems, SDL and UML respectively, are merging." Anders Lidbeck continues. "With the acquisition, time-to-market of our next generation of development tools will be shortened and we will take a leading position that will result in Telelogic becoming the first supplier to present a product based on this new world standard." Synergy effects Telelogic estimates that considerable synergy effects will arise, both re- garding revenue and costs. Examples of synergy effects are: *Revenue from the next generation of development tools will occur ear- lier due to shorter time-to-market *Released sales power with optimized sales activities *Lower cost for recruitment and an increase in productivity compared to new recruitment Value Added Reseller CS Group will use and integrate Telelogic's products and act as a Value Added Reseller in France. Financial terms Payment is done with 800 000 shares and 161 147 options. The shares and options will be part of an issue for non-cash consideration, which will be conducted in January and decided upon at an extra shareholders' meeting on th, January 18 2000. Continuous expansion and new share issue Telelogic's continued expansion will take place partly through an in- creased geographical presence and partly through a broadening of the op- erations into additional vertical industry segments. The acquisition of Verilog, that constitutes a first step in this expansion strengthens the company's presence in France, Germany and the USA. Furthermore, it adds two vertical segments, automotive and aerospace. The continued expansion is expected to cause additional capital needs re- lated to the organic growth as well as further strategic acquisitions out- side of Europe, financed entirely or partly with cash. These potential ac- quisition targets consist mainly of companies, which can increase Tele- logic's service offering locally in each respective market. Information and consultation of employee representatives Verilog's employee representatives have been informed and consulted with respect to the acquisition. About CS Verilog S.A Verilog, that is owned by CS Communication et Systèmes, develops and mar- kets development tools for real time. The company has 84 employees and the estimated revenue for 1999 is 60 MFR. Verilog is headquartered in Toulouse (France) and has sales offices in Paris (France), Dallas (USA), Boston (USA), San José (USA) and Munich (Germany). Verilog's customers include companies like Alcatel, Aerospatiale, Motorola, Honeywell, Philips, Rock- well Collins, Matra Nortel, Dialogic, Bosch and Eurocopter. Verilog develops and markets three products: *ObjectGeode, that directly competes with Telelogic's tool family Tau. *Scade, a development tool for safety critical systems. Scade is the result of a cooperation between Verilog, Aerospatiale and Schneider. *Logiscope, a tool for quality metrix. For more information about Verilog, visit About CS Communication & Systèmes CS Communication & Systèmes is fully devoted to turning information tech- nologies into solutions. CS Group is centered on two core businesses : *Systems and networks. CS offers a comprehensive range of intelligent and secure solutions for integrating applications and networks. It is a balanced provider of busi- ness and technical software solutions. *Telecommunications Equipment CS is a leading european supplier of innovative multimedia solutions (mul- timedia network equipment for enterprises ; local loop access network equipment for telcos). CS has a commercial presence in 50 countries and employs over 5000 people. Quoted on the Paris Stock Exchange, CS had revenues of 3,5 billions French Francs in 1998. About Telelogic AB Telelogic, which today has subsidiaries in ten countries, and is repre- sented by distributors in 20 additional countries, is the market leader in development tools for real-time applications. The Company's products have been used for several years in a demanding industrial setting, where cus- tomer use is well documented. Offering high quality graphical development tools and related services makes software development faster and more re- liable. The Company has a global customer base which includes the leading suppli- ers, such as Alcatel, Cisco, Ericsson, Fujitsu, Hewlett-Packard, Lucent, Motorola, NEC, Nokia, Nortel Networks and Siemens, as well as a number of universities and institutions all over the world. Software market trends point toward visual program methods, a field where Telelogic leads in the production of the next generation of development tools. After the recently implemented stock issue, the Company is well equipped to quickly deliver comprehensive solutions to the complex chal- lenges facing the communications industry. For more information about Telelogic, please visit Contacts: Anders Lidbeck Catharina Sundelin President & CEO Information & Investor Relations Manager Telelogic AB Telelogic AB Phone: +46 40-17 47 00 Phone: +46 40-17 47 30 Fax: +46 40-17 47 47 Fax: +46 40-17 47 47 E-mail: an- E-mail: ca- Catherine Dedieu Information Manager CS Communication & Systèmes Phone: + E-mail: catherine.dedieu@cie- ------------------------------------------------------------ Please visit for further information The following files are available for download:

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Telelogic is a leading global provider of solutions for advanced systems and software development. Telelogic's intuitive, best-in-class software tools automate and support best practices throughout the development lifecycle, leaving development teams free to concentrate on core competencies and apply their skills and energy to value-added tasks. By optimizing each phase of development, Telelogic enables companies to deliver higher quality systems and software with greater predictability, reduced time-to-market and lower overall costs. To ensure interoperability with third-party tools, Telelogic's products are built on an open architecture and standardized languages.