Network Associates to Acquire Magic Solutions
PR Newswire, Tuesday, March 24, 1998 at 16:34
Union Brings Together Top Two Providers of Microsoft NT Service Desk Solutions
SANTA CLARA, Calif., March 24 /PRNewswire/ -- Network Associates, Inc.
(NASDAQ:NETA), formerly McAfee Associates, and Magic Solutions, Inc. today
announced a definitive agreement pursuant to which Network Associates will
acquire Magic Solutions for cash in a purchase transaction valued at
approximately $110 million.
The merger solidifies Network Associates' position as the world's largest
provider of internal help desk applications for the Microsoft NT operating
environment, and the second largest provider of client/server service desk
solutions overall. In addition, the combination creates the largest dedicated
sales and services organization in the internal service desk market. The
combined organizations have more than 200 sales, consulting and service
professionals worldwide, dedicated to supporting current and future customers.
Both companies are market leaders, with products that serve different
segments of the internal help desk market. Magic Solutions pioneered the
internal support market with the introduction of the industry's first packaged
support application in 1988. Today, the company has an installed base of more
than 5,000 organizations, comprised mainly of smaller organizations and
departments within Fortune 1000 companies. The current release of the Magic
Solutions' product, SupportMagic 4.0, is widely recognized for its ease of
use, customization capabilities, and advanced knowledge management tools.
According to market researcher Dataquest, Network Associates' McAfee
ServiceDesk has the largest market share of any comparable product that runs
on the NT platform. By combining traditional call tracking and problem
resolution help desk functionality with advanced desktop management software,
"self-healing" PC technology, and automated fault analysis and resolution, the
McAfee Total ServiceDesk redefined the help desk market. With this broad
functionality, McAfee Total ServiceDesk has found strong market acceptance,
particularly in large organizations with complex environments.
The combined company's primary product lines, including SupportMagic/SQL
and McAfee Total ServiceDesk, will continue to be sold and supported. In
addition, the companies will combine their development resources to deliver
service desk solutions that combine the ease of use and customization of
SupportMagic with the scalability and enterprise features of McAfee Total
ServiceDesk. The integrated product, which will feature a unified data model,
architecture and user interface, is expected to be released before the end of
1998.
"This substantial investment in the internal help desk market reflects our
commitment to the market and to the customers of both companies," said Zach
Nelson, general manager of Network Associates' Total ServiceDesk Division.
"We continue to expand the Total ServiceDesk solution to create an integrated
application that manages the procurement, deployment, and support of a
company's technology assets. This merger gives us the ability to accelerate
our delivery of this vision while supporting customers on a global basis."
"Magic is a pioneer in this field, and our global market presence is a
testament to the work and dedication of this organization," said Igal
Lichtman, founder, chairman and CEO of Magic Solutions. "Our customers have
been asking us to expand our organization and product line to support their
technology requirements on a larger scale. By joining with Network
Associates, we instantly meet these needs."
The transaction is expected to close in the early part of the second
quarter, 1998.
Under the terms of the agreement entered into in early March, Network
Associates will pay to the Magic Solutions' stock and option holders cash of
approximately $110,000,000. Both boards have approved the merger, and the
companies plan to complete the transaction early in the second quarter of
1998, subject to approval of Magic Solutions' shareholders, and other
customary closing conditions. In connection with the closing of the proposed
transaction, Network Associates currently expects to incur a charge to
earnings related to the purchase of in-process research and development of
approximately $90 million.
Magic Solutions is a leader in providing automated help desk and asset
management solutions to more than 4,500 organizations worldwide. A pioneer in
the fast-growing support industry, Magic Solutions is dedicated to developing,
marketing and supporting software solutions that improve customer satisfaction
and end-user productivity, while driving down the total cost of support. The
company has a strong presence in the healthcare, government, financial
services, computer, and manufacturing sectors, as well as across the world.
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