Arbor Software and Hyperion Software have agreed to merge to become Hyperion Solutions, in a deal valued at $760 million.
The move signals the first major consolidation in the overstocked online analytical processing (Olap) market, although industry watchers have been waiting for this to occur for some time, and follows the resignation of Jim Dorrian, Arbor?s founder and chairman, last week.
Discussions between the two organisations started at the end of last year, but foundered when Hyperion demanded an acquisition premium on its stock price, to which Arbor objected because it was keen to go for a merger without paying a premium.
Jim Perakis, chairman and chief executive of Hyperion, 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, which means that Arbor shareholders will own about 40 per cent of the joint company, while Hyperion shareholders will control the rest. Arbor generated $82 million in revenues last year, while Hyperion turned over $271 million.
Hyperion Solutions will turn over $350 million and have a market capitalisation of $1.3 billion. It will be based at Arbor?s headquarters in Sunnyvale, California, but sales and marketing will operate out of Hyperion?s base in Stamford, Conneticut.
Jim Perakis will become chairman for about six months, when he will be replaced by John Dillon, Arbor?s president and chief executive. Dillon will assume the same role at Hyperion. Four members of the board will be Hyperion executives and the other three will come from Arbor.
It is unclear at this point what the merger means in terms of redundancies or product integration, but the two offerings are fairly complementary. Arbor sells an Olap engine, while Hyperion sells Olap applications for budgeting and planning and financial reporting and consolidation.
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