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Solution 6 - Time to Buy

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    ASX Code: SOH
    Announcement: Proposed acquisition of Novient Inc/current trading update

    Date: 11 June 2002 - 09:16:05
    Market Sensitive: Yes

    SOLUTION 6 HOLDINGS LIMITED 2002-06-11 ASX-SIGNAL-G

    HOMEX - Sydney

    +++++++++++++++++++++++++
    SOLUTION 6 ACQUISITION SECURES GLOBAL MARKET LEADERSHIP IN
    PROFESSIONAL SERVICES SOFTWARE

    The Directors of Solution 6 Holdings Ltd are pleased to announce the
    proposed acquisition of US-based Novient Inc. The acquisition will
    result in clear worldwide leadership for Solution 6 in the market for
    specialist software solutions designed for professional services
    organizations. These include consulting firms, lawyers, accountants
    and IT services businesses.

    The acquisition is consistent with Solution 6's strategic focus on
    the professional services software market and will strengthen
    Solution 6's product capability. Solution 6 will benefit from the
    addition of Novient's highly regarded technology, its high calibre
    management team, and its blue chip customer base in 48 countries.
    Most importantly, Solution 6 will increase its ability to compete and
    grow in the US - the world's largest professional services market.

    PROPOSED MERGER TERMS

    Under the proposed terms of the acquisition, consideration will
    comprise US$12.5 million of shares in Solution 6, and cash of
    $US150,000. In addition, an earn-out of US$1.8 million will be
    payable if agreed performance criteria are met. The earn out will be
    settled through a further issue of Solution 6 shares.

    The merger proposal has been approved by Novient's major shareholders
    who will be issued the initial share consideration at between A$0.65
    and A$0.75 per share. Based on current exchange rates, Novient's
    shareholders will emerge with between 12 and 13 per cent of Solution
    6's issued capital.

    The acquisition will be subject to approval by Solution 6
    shareholders in a meeting to be scheduled for mid-July. Solution 6
    will have a broad spread of shareholders, with the key shareholders
    continuing to be Telstra (13 per cent), CPH (7 per cent) and MEM,
    part of the Guinness Peat Group (7 per cent).

    BENEFITS OF THE PROPOSED MERGER

    Mr Neil Gamble, Chief Executive of Solution 6 Holdings, said:
    "Novient and the recently acquired Keystone Solutions will
    significantly enhance shareholder value over the next financial year,
    as they both introduce significant growth opportunities for our
    ongoing business in both market share and geographic reach through
    the US and Europe.

    Novient will be a valuable addition to the Solution 6 Group as it has
    a wide range of blue-chip customers, including Acenture, Computer
    Sciences Corporation, Hewlett Packard, KPMG and SAP, with over
    150,000 licensed users in 48 countries. We will be able to offer the
    most comprehensive set of software solutions for professional service
    organizations of any supplier in the world, providing a very solid
    foundation for revenue and earnings growth," he added.

    Mr Gamble said: "It is a major seal of approval for Solution 6's
    corporate strategy that Novient's US venture capital shareholders
    have agreed to convert their shares to Solution 6 stock.

    They recognize the underlying value of the Solution 6 software
    businesses and the determination of management and the board to
    generate strong earnings growth for shareholders through the rapid
    integration of Novient with our existing operations, where we will
    maximize cross-selling and new sales opportunities," he added.

    Solution 6 is expected to move quickly to realize the benefits from
    the Novient acquisition, in a similar fashion to the recent addition
    of Keystone Solutions. Just two weeks following the completion of
    this acquisition, Solution 6 was able to announce that one of the
    world's largest legal firms, Clifford Chance, finalized contracts for
    the supply of a new Keystone global practice management system. In
    addition to expected new revenues of more than A$20 million from the
    Clifford Chance contract, integration plans have identified over A$3
    million of annualized cost savings implementation of which will
    largely be completed by the end of June. Keystone management and
    staff are already making valuable contributions to the future success
    of the Solution 6 group.

    Mr Gamble concluded, "The Novient acquisition represents the next
    logical step in the evolution of Solution 6 to become the world's
    leading supplier of professional services software - with substantial
    cash reserves, positive operational earnings and strong revenue
    growth opportunities."

    UPDATE ON CURRENT TRADING

    The Directors of SOH expect to announce in August the group's best
    annual result in five years, powered by a strong performance by the
    professional services software division. This division is expected to
    post revenues approaching a$160 million and meet its target EBITDA
    margin of 10 per cent (before corporate allocations) for the full
    year. The division has continued to improve its cash generation such
    that the group expects to close the year with robust operational cash
    reserves approaching A$35 million.

    The Directors have determined that the IT Services division is not a
    core business of the group and confirm that discussions are at an
    advanced stage for the divestment of this business. In the meantime,
    this division is being managed as an autonomous business under the
    supervision of a separate Board sub-committee.

    The group's IT Services and Enterprise Software operations have
    continued to experience difficult economic condition during the
    second half of the financial year, which has impacted the
    profitability of the group.

    ABOUT NOVIENT

    Novient is the pioneer of software solutions for the service economy.
    Novient provides visibility into resources and projects to allocate
    the right people to the right projects at the right time. With over
    150,000 users in 48 countries, Novient's Service Process Optimization
    (SPO) solution is used by the world's largest organizations to
    optimize workforce performance. Customers include Accenture,
    Cingular, Compaq, Computer Sciences Corporation, DuPont, Nortel
    Networks, and SAP. Founded in 1995, Novient is privately funded by
    leading venture capital firms, including Hummer Winblad Venture
    Partners, LLR Partners, Mellon Ventures, Noro-Moseley Partners,
    Southeastern Technology Fund, and Wachovia Capital Partners. See
    www.novient.com for further details.

    For further details visit our website www.solution6.com or telephone:
    Solution 6 - Neil Gamble/Iain Keddie - ph: +61 2 9278 0666
    City Public Relations - Tim Allerton - ph: +61 2 9281 7272
 
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