Novell to buy Web services company
Published: 10 Jun 2002 15:06 BST
Business software maker Novell said it would acquire SilverStream Software, whose applications help companies build Web services, in a deal worth $212m.
The deal emphasises Novell's push into the young field of Web services, a way of creating and using software that allows different computing systems to interact and conduct transactions online.
Novell, a onetime software heavyweight, has been working hard to make a name for itself in the new field against competitors such as Sun Microsystems, Microsoft and IBM. Last month, it released a new technology specification that ties directory services software closer to emerging Web services tools.
"We're coming at this market from a different place. Instead of the monolithic approach based on proprietary products that others have adopted, Novell is focused on offering a cost-effective, flexible alternative that allows the products of all vendors to work together," said Chris Stone, vice chairman of Novell's office of the chief executive.
SilverStream's eXtend product line will be re-branded under the Novell name.
The deal calls for Provo, Utah-based Novell to pay $9 for each of the approximately 23.6 million outstanding shares of SilverStream. SilverStream should have about $100m in cash on hand at the end of the deal, Novell said.
SilverStream chief executive David Litwack and other insiders who together control about 20.33 percent of the outstanding shares have already pledged to vote for the deal. Litwack will become a senior vice president of Novell and will join Novell's worldwide management committee. SilverStream's offices will remain in Billerica, Massachusetts, and the deal is expected to close in July.
The acquisition should begin adding to the bottom line in 2004, Novell said. The company said it did not expect the deal to have a material impact on revenue and ongoing expenses in the third fiscal quarter, but it should add about 1 percent to total Novell revenue in 2002. In fiscal year 2003, SilverStream is projected to be slightly dilutive to Novell earnings.
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