Corel looks likely to buy graphics firm Micrografx in an all stock deal valued at £22.9m ($32m).
The deal values Micrografx stock at $2 and will be in stock as long as Corel's share price stays above $2.90. Otherwise, Corel will have to pay cash.
Shares in Micrografx were trading at 95 cents early Monday afternoon.
The acquisition is billed as a sign that the troubled Canadian tech firm has turned the corner after an investment by Microsoft saved it from bankruptcy last year.
Corel is looking to strengthen its position in the graphics market, add web-based functionality to its product lines, and develop new technology for wireless and web-based services.
The proposed merger will help it make cost savings in the last three months of its fiscal year.
Derek Burney, president and chief executive at Corel, said the deal would better help the company reach the technical illustration market, and that the firm could leverage Micrografx work to create graphics-rich content within its services offerings.
He added: "Finally, by devoting greater resources to Micrografx's Enterprise Process Management (EPM) division, we will become a major force in a new and lucrative market, while utilising those technologies to broaden our portfolio of creative product applications."
Shares in Corel were trading at $2.97 on the Frankfurt stock market Monday afternoon.
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