SumTotal Bidding War: Vista Raises Price Again

Vista Equity Partners has increased its offer for SumTotal Systems for a second time to $4.85 per share in cash, or $4.95 per share depending on developments in the company’s breakup fee with Accel-KKR. The bid tops rival bidder Accel-KKR’s sweetened offer for the company from yesterday of $4.80 per share. The company yesterday announced it would maintain its agreement to sell to Accel-KKR, but at an increased price after Vista Equity Partners submitted a higher bid during the deal’s go-shop period.

Press Release:

Vista Equity Partners Further Increases Its Offer to Acquire SumTotal Systems to $4.85 Per Share in Cash, or to $4.95 Per Share in Cash if Breakup Fee in SumTotal’s Amended Merger Agreement With Third Party is Invalidated or Reduced to the Original Amount

San Francisco, CA, May 20, 2009 — Vista Equity Partners Fund III, L.P. (“Vista”) announced today that it has further increased its offer to acquire SumTotal Systems, Inc. (“SumTotal” or “the Company”) (Nasdaq: SUMT). The amount payable under Vista’s offer varies, depending on whether the increased $6.67 million breakup fee that the Company agreed to on May 18, 2009, in connection with an amendment to its existing merger agreement with a third party, is invalidated or reduced.

· Vista’s proposal is for $4.95 per share in cash, which values the Company’s outstanding equity at approximately $163 million, assuming that the increased $6.67 million breakup fee contained in the Company’s amended agreement with a third party is invalidated or otherwise reduced to the original amount of $3.1 million. Any smaller reduction would result in a pro rata increase from the $4.85 per share price referred to below.

· Vista’s proposal is for $4.85 per share in cash, which values the Company’s outstanding equity at approximately $160 million, if the increased breakup fee in the Company’s amended agreement stands. The difference reflects the per share value of the increase in the breakup fee.

Vista, which owns approximately 13% of SumTotal’s outstanding Common Stock, is the Company’s largest stockholder. Vista focuses on equity transactions involving enterprise software businesses and technology-enabled solutions companies. The acquisition will be fully funded by Vista.

As previously announced, on May 11, 2009, Vista confirmed its offer to acquire SumTotal for $4.50 per share in cash. Two days later, on May 13, 2009, Vista increased its existing offer for SumTotal to $4.75 per share in cash, and on May 14, 2009, the Board of Directors of SumTotal announced that Vista’s proposal was a superior proposal, as defined in SumTotal’s existing merger agreement. The “go shop” provision of SumTotal’s existing merger agreement provided for a breakup fee of $3.1 million, specifically contemplated that a party in Vista’s position could make multiple bids and provided that, following our proposal, SumTotal had to give the third party three business days to increase its bid before executing a definitive agreement with Vista. On the evening of May 18, with no notice to Vista and without providing Vista with an opportunity to raise its bid, SumTotal informed Vista that it had executed a revised merger agreement with the other party, and that the revised merger agreement increased from $3.1 million to $6.67 million, or approximately $0.10 per share, the breakup fee the Company would be obligated to pay if the Company were to terminate that agreement to accept a superior proposal from Vista. This revised agreement provided for an increase in the purchase price of only $0.05 per share over Vista’s prior offer.

Robert F. Smith, Managing Principal of Vista Equity Partners, said, “Vista is surprised and disappointed to learn that, in the midst of an active auction, SumTotal chose to sign an amended merger agreement containing an increased breakup fee without first giving Vista notice or any opportunity to raise its bid. Contrary to the go-shop provision it had agreed to, and despite Vista having raised its price twice in the last eight days, from $3.25 to $4.50 per share and then from $4.50 to $4.75 per share, SumTotal’s Board traded away $0.10 of value that could have been delivered to SumTotal’s shareholders for a mere $0.05 increase over our prior bid.”

Mr. Smith further stated, “Vista believes its current proposal is superior to the terms of the amended merger agreement that the Company has entered into. Going forward, Vista expects an unbiased and more open approach that focuses on maximizing shareholder value, and is certain that SumTotal’s other shareholders will demand no less of SumTotal’s Board.”

Vista Equity Partners Fund III, L.P., Vista Equity Partners Fund III (Parallel), L.P., VEPF III FAF, L.P., Vista Equity Partners Fund III GP, LLC, VEFIIGP, LLC, Vista Equity Partners III, LLC, Robert F. Smith, Charles R. Whitchurch and John N. Staples III (the “Participants”) filed a preliminary proxy statement relating to the solicitation of proxies from the stockholders of the Company with the Securities and Exchange Commission (the “SEC”) on April 22, 2009. Information relating to the Participants is contained in the Schedule 14A they filed with the SEC on April 6, 2009 (as amended on April 9, 2009) and in the preliminary proxy statement. The preliminary proxy statement and Schedule 14A and amendments thereto are available at no charge at the SEC’s website at http://www.sec.gov.

WE ADVISE ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND THE DOCUMENTS RELATING TO THE SOLICITATION OF PROXIES BY OR ON BEHALF OF THE PARTICIPANTS IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY STATEMENT, IF AND WHEN FILED, AND ANY OTHER RELEVANT DOCUMENTS WILL BE AVAILABLE AT NO CHARGE ON THE WEBSITE OF THE SEC AT HTTP://WWW.SEC.GOV.

If you want to receive a copy of the definitive proxy statement and form of proxy (when and if they become available), please call our proxy solicitor, D.F. King & Co., Inc. toll free at (800) 758-5378 (banks, brokers and callers from other countries should call collect at (212) 269-5550).

About Vista Equity Partners

Vista Equity Partners (“VEP”), a private equity firm with offices in San Francisco and Chicago, has over $2.3 billion in equity capital under management. VEP was founded in 2000 and is focused on equity transactions involving enterprise software businesses and technology-enabled solutions companies. Over the last nine years, VEP has successfully demonstrated its ability to create value through a disciplined investment focus on companies that offer mission-critical software and technology-enabled solutions. Since 2000, the VEP team has invested over $1.4 billion in equity and completed over $7 billion in total transaction value. Vista Equity Partners’ financial and operational abilities combined with its depth of experience in the software sector enable VEP to complete diligence quickly and to provide a high degree of deal certainty. VEP is currently investing out of its latest fund, $1.3 billion Vista Equity Partners Fund III, which closed in 2008.