WSJ(5/22): WebMethods set To Acquire Active Software For $1.3B
By Nick Wingfield
Staff Reporter of The Wall Street Journal
WebMethods Inc. is expected to announce plans today to acquire Active
Software Inc. in a stock deal valued at $1.3 billion, uniting two
fast-growing players in the enterprise-software market, according to people
familiar with the matter.
The boards of webMethods of Fairfax, Va., and Active Software, of Santa
Clara, Calif., both approved the transaction over the weekend. Active
shareholders will end up with about 28% of the combined company, which is
expected to be called webMethods, according to people familiar with the
deal.
Phillip Merrick, chief executive of webMethods, will serve as chief
executive of the combined companies. Jim Green, chief executive officer of
Active, will become the chief technology officer and executive vice
president at webMethods.
Representatives for webMethods and Active Software declined to comment.
The deal could be a sign of convergence between formerly separate segments
within the enterprise software market. WebMethods, a large player in the
socalled business-to-business integration market, specializes in software
that allows corporations to get sophisticated applications communicating
with each other across the Internet.
(DOW JONES) DJN: WSJ(5/22): WebMethods To Acquire Active Software For $1.3B
DJN: WSJ(5/22): WebMethods To Acquire Active Software For $1.3B
By Nick Wingfield
Staff Reporter of The Wall Street Journal
WebMethods Inc. is expected to announce plans today to acquire Active
Software Inc. in a stock deal valued at $1.3 billion, uniting two
fast-growing players in the enterprise-software market, according to people
familiar with the matter.
The boards of webMethods of Fairfax, Va., and Active Software, of Santa
Clara, Calif., both approved the transaction over the weekend. Active
shareholders will end up with about 28% of the combined company, which is
expected to be called webMethods, according to people familiar with the
deal.
Phillip Merrick, chief executive of webMethods, will serve as chief
executive of the combined companies. Jim Green, chief executive officer of
Active, will become the chief technology officer and executive vice
president at webMethods.
Representatives for webMethods and Active Software declined to comment.
The deal could be a sign of convergence between formerly separate segments
within the enterprise software market. WebMethods, a large player in the
socalled business-to-business integration market, specializes in software
that allows corporations to get sophisticated applications communicating
with each other across the Internet.
The company's software can provide a common language that lets trading
partners connect incompatible procurement applications, allowing them to buy
and sell, for instance, automobile parts online. WebMethods and others have
capitalized on the explosion of business-to-business or B2B exchanges set up
by "dot-coms" and more established companies.
Active Software has focused on another arcane but lucrative piece of the
business software market, dubbed "enterprise application integration" or
EAI. EAI companies make software that allows applications inside a
corporation to communicate with each other. With Active Software's product,
for instance, a business can connect a supply-chain management program with
an accounting application. Active Software has developed more than 60
software "adapters" that provide hook-ups between disparate corporate
applications.
By acquiring Active Software, webMethods hopes to simplify the sales process
for customers that want a single provider of integration programs for their
internal corporate networks and the Internet, a person familiar with the
company's thinking said. "The customers were asking the vendors, 'Why can't
you do it all for me?' " said this person.
The stock prices of both companies have suffered in recent months along with
the stocks of other technology companies. After one of the hottest initial
public offerings of the year, webMethods' shares are well off their trading
high of $336.25. In regular 4 p.m. trading on the Nasdaq Stock Market
Friday, the company's shares fell $7.875, or 8.3%, to $87.
Active Software, meanwhile, has slipped substantially from its high of
$149.125. In 4 p.m. Nasdaq trading on Friday, its shares rose 56.25 cents to
$33.
Morgan Stanley Dean Witter & Co. advised webMethods on the acquisition.
Goldman Sachs Group Inc. advised Active Software.
(END) DOW JONES NEWS 05-22-00
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