In a move to further strengthen its middleware software portfolio, IBM plans to acquire CrossWorlds Software in a cash transaction valued at $129m.
Big Blue said its WebSphere ebusiness infrastructure software revenue grew 75 per cent in the third quarter of 2001, compared to the same quarter of 2000. The company has been integrating CrossWorlds' software with WebSphere for four years.
CrossWorlds' product, which supports open internet standards such as Java 2 Enterprise Edition and XML, automates business processes that integrate multiple applications, such as those for managing customer relationships and supply chains as well as enterprise resource planning.
IBM intends to retain all 350 CrossWorlds employees. The company went public in June 2000, and has yet to turn in a profit. The deal values CrossWorlds at $4.65 a share, a 31 per cent premium to the stock's Monday closing price of $3.54 on Nasdaq.
CrossWorlds is known for its controversial founder and former chief executive Katrina Garnett who earned notoriety for appearing in print ads for the company wearing a low-cut black evening dress.
Garnett stepped down as chief executive in October 1999 but remained as chairman of the board of directors, a position she will keep until the deal closes in the first quarter of 2002.
According to IDC, software supporting the business process integration requirements of specific industries represents the fastest growing sub-segment of ebusiness infrastructure software with annual growth of 25 per cent. The researcher estimates the opportunity for this sub-segment to be $4bn by 2005.
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