New World Systems Bought Out In $670M Deal

TROY — Plano, Texas-based Tyler Technologies Inc. (NYSE:
TYL) announced it has signed an agreement to acquire Troy-
based New World Systems Corp. for $670 million in cash and
stock.

New World Systems is a provider of public safety and
financial management software for local government.

Founded in 1981 by president and CEO Larry D. Leinweber,
the company has more than 2,000 public sector customers
and more than 470 employees.

In the announcement of the deal, Tyler said that the
“companies are highly complementary” and that combining
them “supports Tyler’s strategy of being an industry leader in
all major enterprise applications essential to local
government.”

The statement also said that there are “no plans to materially
impact either company’s workforce, and New World Systems’
headquarters in Michigan is expected to continue to operate
virtually unchanged.”

New World Systems’ principal products are Aegis, a public
safety suite for dispatch centers, police officers, firefighters,
paramedics, corrections officers, command staff, and all first
responders, and Logos, public administration software that
meets the accounting needs of city and county governments.
Public safety represents approximately 67 percent of New
World Systems’ revenues.

Under the terms of the agreement, Tyler will acquire all of the
equity in New World Systems for $360 million in cash and
approximately 2.1 million shares of Tyler’s common stock,
representing approximately 5.9 percent of Tyler’s outstanding
common shares post-transaction. The cash portion of the
purchase price will be funded from cash on hand and
proceeds from new debt. Tyler said the deal is expected to
close by Dec. 31.

Leinweber will join Tyler’s board of directors upon the closing
of the transaction.

Tyler said the deal will add $134 million to its revenue and
$49 million a year to adjusted earnings.

“This is a complementary and extremely comfortable
acquisition for Tyler,” said John S. Marr Jr., Tyler president
and CEO. “The companies serve related addressable
markets, our cultures are very compatible, and we have
similar financial and operational philosophies.”

He added that New World is “already performing well
financially and operationally in segments of the public sector
market that are strategically important to us.” He said his
company plans to invest in New World’s products “and find
new opportunities both in our combined client bases and in
markets where they currently are most competitive. We will
also explore growth opportunities from offering enhanced
services such as software as a service, disaster recovery
services and other existing Tyler products to New World
Systems’ installed customer base.”

Tyler plans to integrate its Odyssey courts and justice
software with the Aegis public safety platform to create a new
end-to-end enterprise criminal justice solution.

“Odyssey is already a clear leader in courts and justice
software, and we’re seeing very solid growth from our e-filing
solution,” Marr said. “By adding a market leading public safety
offering to Tyler’s portfolio of courts and justice solutions, we
can deliver a comprehensive enterprise criminal justice
system that does not exist in the market today. We believe it’s
important for the judicial and public safety communities to
understand the incremental value they gain from having a
leading courts and justice system and a leading public safety
solution in one offering. We believe that our combined
offering will create a unique opportunity for communities at the
local, county and statewide levels.”

And in a statement, Leinweber said: “I certainly see this
transaction as an opportunity for New World Systems
employees and clients to benefit from the kind of investments
and vision that Tyler Technologies brings to bear. Both
companies operate and have grown in a very responsible
manner, our products are strong, we deliver good financial
results and have high client retention. Tyler and New World
Systems are complementary in so many ways that it’s hard to
see anything but tremendous opportunity for employees,
clients and investors alike.”

A replay of a conference call discussing the transaction is
available in the investor relations section of Tyler’s website at
http://investors.tylertech.com/Profile. The replay is also
available by phone at (877) 344-7529 (U.S. callers), 412-317
-0088 (international callers) and 855-669-9658 (Canada
callers) using access code 10073225.

Tyler’s client base includes more than 13,000 local
government offices in all 50 states, Canada, the Caribbean,
the United Kingdom and other international locations. Forbes
has named Tyler one of “America’s Best Small Companies”
eight times and the company has been included six times on
the Barron’s 400 Index, a measure of the most promising
companies in America. More at http://www.tylertech.com.

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