Neon brightens lineup with Convoy buy
By Bloomberg News
Special to CNET News.com
June 9, 1999, 6:55 a.m. PT
New Era of Networks, the No. 1 maker of software that links incompatible computer systems, agreed to buy closely held Convoy for about $42 million in stock to broaden its product line.
New Era, also known as Neon, makes middleware, programs that let new corporate software work with older computer systems. The company has been on a buying spree, acquiring rivals that are expert at handling various types of business software as well as companies that focus on specific industries, such as insurance and telecommunications.
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Neon wants to offer all types of middleware in one product line that can work with all dominant corporate software. Convoy's programs are tailored to work with software from PeopleSoft, the No. 2 maker of business-management software. In May, Neon bought SLI International, which helps programs from No. 1 corporate software maker SAP work with older data.
"We want to be able to provide one-stop shopping," said Mike Donaldson, Neon's vice president for worldwide marketing.
Neon must master about 75 different technologies to satisfy demand for all types of middleware, Donaldson said. He declined to specify how many technologies Neon has in its product line.
Emeryville, California-based Convoy, with revenue of $10.4 million for the year ended March 31, has more than 150 customers worldwide and 75 employees in the United States, the United Kingdom, and the Netherlands. Neon should see a "slight uptick" this year in sales and profit from the acquisition, Donaldson said.
The Convoy acquisition is expected to be completed by Friday.
Neon in April also bought Vie System, a closely held New Jersey company, to acquire additional software technology.
Neon's main rival in the market for so-called enterprise application integration software is TSI International Software.
Neon, based in Englewood, Colorado, had revenue of $65.8 million last year. Its shares fell 1.5625 to 52 in midafternoon trading, and have climbed 18 percent this year.
Regards
Neil |
