Arbor Software and Hyperion Software have agreed to merge in a deal valued at $760 million (#466 million). The resulting company will be called Hyperion Solutions.
The move signals the first major consolidation in the OLAP (online analytical processing) database market, although industry watchers have been expecting such a move for some time.
The merger follows the resignation of Jim Dorrian, Arbor's founder and chairman, late last month.
Discussions between the two organisations started at the end of last year but foundered when Hyperion demanded an acquisition premium on its stock price. Arbor objected to this because it was keen to go for a merger to avoid paying a premium.
Jim Perakis, Hyperion's CEO, said, "The merger of Arbor and Hyperion is intended to allow us to broaden the delivery of analytic application solutions to customers worldwide."
Under the terms of the stock-swap transaction, Arbor will issue 0.95 share for each share of Hyperion. This means that Arbor shareholders will own about 40% of the joint company, while Hyperion shareholders will control the rest.
Arbor generated $82 million (#50 million) in revenues last year, while Hyperion turned over $271 million (#166 million).
As Hyperion Solutions, the combined turnover is expected to be $350 million (#214 million) with a market capitalisation of $1.3 billion (#0.8 billion).
Neither company would discuss the possibility of redundancies resulting from the deal, or the future integration of the firms' product lines.
Many of the companies' offerings are complementary rather than competing.
Arbor sells an OLAP engine, while Hyperion sells OLAP applications for budgeting and planning, and financial reporting and consolidation.
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