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Tecnomatix Completes Acquisition of USDATA Corporation

Sep 22, 2003



HERZLIA, ISRAEL� September 22, 2003 � Tecnomatix Technologies Ltd. (NASDAQ: TCNO), the driving force in Manufacturing Process Management (MPM), today announced it has completed the acquisition of substantially all the assets and liabilities of USDATA Corporation, a leading North American developer of manufacturing execution systems (MES) based in Richardson, Texas.

Under the asset transaction first announced on July 30, 2003, Tecnomatix issued in consideration for the acquired assets 851,226 ordinary shares of which 222,309 ordinary shares will be held in escrow for up to 18 months, and will issue up to an additional 94,581 ordinary shares post-closing, subject to certain adjustment provisions. As part of the asset purchase transaction, SCP Private Equity Partners II, L.P., the primary stockholder of USDATA, purchased from Tecnomatix 139,764 ordinary shares for an aggregate purchase price of $2,000,000, and a representative of SCP Private Equity Partners is expect to be appointed to the Tecnomatix Board of Directors.

In connection with the acquisition, Tecnomatix entered into agreements which restrict sales and purchases of Tecnomatix shares by USDATA and its stockholders and place volume limitations on future sales of such shares.

Harel Beit-On, chairman and chief executive officer of Tecnomatix, said, �We view the acquisition of USDATA assets as another step forward in our strategy of broadening the footprint of MPM throughout our customers� manufacturing facilities. This will allow us to offer an end-to-end solution for collaborative planning, engineering, and execution of manufacturing processes from the new product introduction phase through the execution cycle. Our customers will be able to monitor, supervise, and control the manufacturing processes on the shop floor, increasing response time and lowering costs. We believe that this ability will further differentiate Tecnomatix in the marketplace and will become a significant factor in our future growth.

�We are pleased that the USDATA transaction closed on schedule. From an operational standpoint, we expect to rationalize the USDATA cost base immediately by reducing operating costs, including leasing, financial and legal expenses as appropriate. We are already well underway with planning the integration of the USDATA products with our eMPower� family of MPM solutions. We are also in the process of augmenting the USDATA team with proven Tecnomatix employees in key management positions.�

The supervisory-level control and data acquisition (SCADA) and manufacturing execution systems (MES) products formerly offered by USDATA � FactoryLink� and Xfactory� � will be retained, developed and sold under the Tecnomatix name. Tecnomatix plans to maintain USDATA�s extensive network of resellers, distributors and integration partners, augmented by existing Tecnomatix sales channels, to sell FactoryLink and Xfactory, and to leverage this network to sell other Tecnomatix products. Tecnomatix will retain the USDATA Richardson facility and product team as its SCADA and MES competency center.

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About Tecnomatix Technologies Ltd.

Tecnomatix Technologies Ltd. (NASDAQ: TCNO) is the driving force in Manufacturing Process Management (MPM). Today's leading global manufacturers are adopting MPM solutions to expand revenue potential and reduce costs by enhancing manufacturing's ability to support the business strategy of choice. These companies are using Tecnomatix eMPower� MPM solutions to accelerate product introductions, shorten time to volume, and optimize production execution. eMPower enables our customers to succeed with its collaborative, open platform and applications for defining, simulating, managing, and executing manufacturing processes across the extended enterprise.

For additional information about why automotive, electronics, aerospace and other discrete manufacturing leaders -- such as BMW, Ford, GM, Mazda, Comau, Faurecia, Sanmina-SCI, Solectron, Nortel, Philips, Boeing, Airbus, GE Aircraft Engines, Lockheed Martin - have been turning to Tecnomatix MPM solutions, visit

Certain statements made herein that use the words �estimate�, �project�, �intend�, �expect�, �believe� and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties which could cause the actual results, performance or achievements of the Company to be materially different from those which may be expressed or implied by such statements, including, among others, changes in general economic, political and business conditions and specifically, changes in the level of activity in the manufacturing industry, decline in demand to the Company�s products, inability to timely develop and introduce new technologies, products and applications and loss of market share and pressure on prices resulting from competition. For additional information regarding these and other risks and uncertainties associated with the Company�s business, reference is made to the Company�s reports filed from time to time with the Securities and Exchange Commission.

Note: All brand, product and company names are trademarks of their respective owners.

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