Acquisition

FOR IMMEDIATE RELEASE 11 June 2007 SOPHEON PLC DEFINITIVE AGREEMENT SIGNED FOR ACQUISITION OF ALIGNENT SOFTWARE INC ISSUE OF EQUITY Sopheon plc ("Sopheon") announces today that it has signed a definitive agreement to acquire Alignent Software Inc ("Alignent"). Based in California, USA, Alignent is one of only a few suppliers worldwide that specialize in the provision of advanced product and technology roadmapping software for complex global companies. Alignent's flagship offering, Vision Strategist, is generally recognized as the leading application of its kind in the marketplace. The software has a proven track record of helping large organizations improve strategic innovation planning. Some of the foremost aerospace, defense and high-tech companies in the world, including Boeing, BAE Systems, Corning, Honeywell, Lockheed Martin, Motorola and NAVAIR have adopted Alignent's offering as their strategic product planning solution. Alignent's roadmapping software is an ideal complement to Sopheon's existing product innovation process and portfolio management system. Vision Strategist allows the user to visualize and predict how external market and technology trends will impact product plans over time, enabling better decisions on future product direction. A principal advantage of the software is that it improves cross-functional communication and collaboration throughout the planning process. Sopheon's Accolade® enhances the execution of product plans by automating innovation process governance. Although the two applications will continue to be marketed separately, together they will constitute industry's first end-to-end strategic product planning software suite. The acquisition of Alignent will help drive expansion of Sopheon's business in two areas. First, for the company's nearly 100 existing clients in chemical and consumer packaged goods markets, it will extend Sopheon's solution to include strategic product planning. Secondly, Alignent's roster of industry-leading customers offers Sopheon instant credibility, accelerating its entry into a range of new markets, including aerospace, defense and high-tech. Sopheon estimates that the acquisition will advance its product plans for Accolade by a full two years. It will also result in a substantial increase in the size of Sopheon's customer base. Initial feedback from Alignent customers has left the Board highly confident that Sopheon can achieve significant organic growth by selling its Accolade solution to existing Alignent clients challenged with improving innovation process governance. Sopheon expects to begin offering Accolade's product portfolio management capabilities to Alignent customers this summer. Upon the closing, Sopheon expects to take on an annual cost base of approximately $2.4 million, and an annual recurring revenue base of maintenance and software rental contracts of approximately $1.2 million. As noted above, Sopheon expects to build on this revenue base by securing new sales of Alignent software products both into Alignent's existing client base and into Sopheon's client base, in addition to cross-selling Accolade into the Alignent customer base. Sopheon expects the Alignent business to make a positive EBITDA contribution from the first year following the acquisition. Alignent reported audited revenues of $3 million and a $4.3 million net operating loss for the year ended 31 December 2006. This was followed by extensive restructuring activity after which the company was offered for sale. Completion of the transaction is expected to take place on or about 18 June 2007 and is contingent upon the receipt of consents from the shareholders of Alignent, and the completion and delivery of certain ancillary agreements and formalities including the final debt documentation referred to below. The maximum gross value of the acquisition before Sopheon's transaction expenses amounts to $5.50 million, comprising $4.75 million initially upon closing and a further $750,000 in potential earn-out payments. The initial consideration will be reduced by net liabilities of Alignent that are assumed at the closing, which are expected to be approximately $995,000. Accordingly, the initial cash consideration is expected to be approximately $3,755,000. The net liabilities assumed in the Alignent balance sheet upon closing are expected to include approximately $200,000 in net book value of fixed assets and $400,000 of cash and receivables, offset by approximately $650,000 of deferred revenue, $470,000 of payables and $475,000 of professional fees incurred by the sellers for a net total of $995,000 in net liabilities. To the extent that the net liabilities assumed by Sopheon are greater than or less than the estimated figure, the immediate cash consideration will be adjusted so that the overall total value of the transaction upon closing remains $4.75 million. The transaction is subject to earn-out arrangements of up to $750,000 linked to the achievement of sales bookings (including contract renewals) during the period between the closing and 31 December 2007. Any earn-out payment that is earned by the former shareholders of Alignent would fall due on or after 6 March 2008. Achievement of the earn-out objectives would increase the first-year earnings contribution expected from Alignent. The cash consideration, transaction expenses and working capital for the combined group are being funded (i) by $3.5 million of new medium-term debt as described below and (ii) by raising £2.1 million (before expenses) by the placing of 12,000,000 Sopheon ordinary shares at 17.5p per share with financial institutions in London. Application has been made for the new ordinary shares to be admitted to trading on AIM and dealings are expected to commence on 12 June 2007. The medium-term debt assumed of $3.5 million is to be provided by BlueCrest Capital Finance LLC ("BlueCrest"), an existing lender to Alignent. The debt will be repayable over 48 months and will bear interest at a rate linked to certain US Treasury Note Yield rates at closing, and is expected to be between 10% and 11%. The debt will be secured by a cross-guarantee from Sopheon plc to the acquired entity. BlueCrest has provided Sopheon with a commitment letter for the debt and final documentation will be concluded prior to completion of the Alignent acquisition. BlueCrest has also offered the enlarged group an additional $750,000 revolving credit facility secured on accounts receivable. At completion, the $1 million invoice discount facility currently in place with Silicon Valley Bank will accordingly be terminated. Barry Mence, chairman of Sopheon commented: "Our acquisition of Alignent represents significant strategic value to Sopheon. It will help us deepen our penetration in the chemicals and consumer goods markets we currently target, while accelerating our expansion into new markets such as high-tech and aerospace and defense, which offer great upside growth potential. We expect substantial near- and long-term revenue benefits from the transaction, as well as enhanced earnings on an ongoing basis. Given the anticipated returns, the cost of these advances is low-less than 10% dilution to our shareholders. This is a very positive move for our company, for our clients and for our investors." Dennis Clerke, chief executive officer of Alignent commented: "Sopheon has already established strong market position as the premier provider of software applications for innovation process governance. The addition of Alignent's products, people and partners will enable it to deliver an unmatched set of strategic product planning and implementation solutions to business and R&D decision makers. This is an exciting development that will yield important benefits not only to Alignent's customers, but to global manufacturers in all sectors of industry." For further information contact: Barry Mence, Chairman Sopheon plc Tel: + 44 (0)1483 685735 Arif Karimjee, CFO Sarah Wharry, Nominated Seymour Pierce Limited Tel: + 44 (0)207 107 8000 Adviser Adam Reynolds Hansard Communications Tel: + 44 (0)207 245 1100 Andrew Tan + 44 (0)7957 203 685 Floor van Maaren Citigate First Financial Tel: + 31 (0) 205 754 010 About Sopheon Sopheon (LSE:SPE) is an international provider of software and services that help organizations improve the business impact of product innovation. Sopheon's Accolade system automates and governs the innovation process, enabling companies to increase revenue and profits from new products. Sopheon is listed on the AIM Market of the London Stock Exchange and on the Euronext in the Netherlands. For more information, please visit www.sopheon.com.

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