UK software firm Micro Focus is to acquire US company Intersolv in a deal worth $534 million (#328 million), and will change its name following approval of the merger.
Micro Focus was founded in the UK in 1976 and has recently relocated its headquarters to Silicon Valley. The company produces software for developing and managing enterprise applications that focus on moving legacy applications to distributed environments such as the Internet. The company also specialises in mainframe application development and maintenance, Year 2000 and Euro compliance products, and distributed computing products for Unix, NT and the Web.
Intersolv makes products for application enablement, including automated software quality management and data connectivity products. Year 2000 services also form a large part of Intersolv's business.
Stuart McGill, vice president of international development at Micro Focus, said the merged company would announce a name change after it had received clearance from UK and US authorities. He said the two companies had no overlap in products or services, but would benefit from a number of complementary operations.
Micro Focus' services division accounts for only about 10% of the company's business, whereas Intersolv has a much stronger services side. Micro Focus mainly sells direct, while Intersolv has a strong channel presence, and McGill said the merger would allow the combined company to cover more of the market.
Apart from a shared focus on the Year 2000 problem, the companies are also both involved in moving legacy applications to the Web. "Both companies believe there is more value in re-engineering legacy systems for the Web rather than rewriting (the applications)," said McGill. "Many of our customers have taken big server applications and mapped them onto the Web."
As for the future of the merged company, McGill claimed there would not be much change in direction. "We'll be trying to combine our technologies and services to deliver what our customers want," he said. "The initial task will be to integrate our technologies, and we need to deliver more quality and testing solutions, and round out our enterprise development business."
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