Micro Focus Group is to acquire Intersolv in a $534 million deal, creating a major new software powerhouse specialising in application development, maintenance and distributed access.
Micro Focus, established in the UK and now headquartered in Mountain View, California, carved out its reputation in bridging Cobol based mainframes with distributed environments and in mainframe development and maintenance.
Similarly, Intersolv made its mark in application development, focusing on client/server environments, and more recently, on the Internet and Intranets.
With more than 4.5 million licences, Intersolv reported revenues of $195 million, and Micro Focus said yesterday that their combined revenues for the trailing four quarters exceed $375 million. The two companies will share some $125 million in cash reserves. Employing almost 2,000 staff, no layoffs are expected despite inevitable duplication.
Martin Waters, Micro Focus' CEO, explained the rationale for merging. He said: "With the new millennium approaching and the drive toward globalisation of IT through the Internet, customers want a strategic partner to make effective use of new information technologies while leveraging their existing investment."
Michael Gullard and Martin Walters will continue as chairman and CEO respectively, and Walters added: "The Intersolv management team brings a great deal of experience and their addition to the Micro Focus team will significantly enhance our ability to pursue aggressive growth plans."
Gary Greenfield, president and CEO of Intersolv, is expected to be a full board member along with other senior directors at Intersolv.
Greenfield commented: "Intersolv's mission has been to accelerate the delivery of information systems and Micro Focus shares that mission. With the combined distribution power of our extensive channels around the world, we expect to be able to attract and serve more customers than ever before."
When their marketing and distribution capabilities are combined, Micro Focus and Intersolv have an extensive network of field sales, telesales, and worldwide channels, and 500-plus technology and marketing partnerships.
The deal, expected to close in 90 days, has been approved by both boards. It remains subject to the approval of shareholders and regulatory authorities in the UK and US.
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