Micro Focus, Intersolv Execs See Merger Strengthening Both
By ANTHONY PALAZZO
Dow Jones Newswires
BUENA PARK, Calif. -- Micro Focus Group PLC's (MIFGY)
half-billion dollar acquisition of Intersolv Inc. (ISLI) gives it a services
business to complement its current lineup of software-development
products, its chief executive said.
"The benefit we see is to be able to offer our customers much more of the
solutions they need to develop applications in enterprise environments,"
Micro Focus President and Chief Executive Martin Waters told Dow
Jones.
Micro Focus, which makes software used to develop business
applications for mainframe and cross-platform computer environments,
"had nothing to offer" in the way of managing the software-development
process, Waters said.
Intersolv boasts a 300-member services organization, automated tools to
manage software quality and configuration, and expertise in connecting
data residing on different computer platforms.
Together, the companies will have deeper penetration of their large
accounts, counting 96 of the top 100 companies in the Fortune 500 as
clients, said Gary Greenfield, Intersolv's President and Chief Executive.
"We have things that we weren't able to do for those customers that we'll
now be able to do - things that our customers were asking us to do and
individually we were not able to provide," Greenfield said.
The companies plan to cross-sell Year 2000 products and services, in one
example of potential benefits of the merger, Greenfield said.
The executives said their combined company will be a stronger competitor
to rivals such as Platinum Technology Inc. (PLAT), Compuware Corp.
(CPWR) and Rational Software Corp. (RATL) when bidding for business
from these large customers.
The combined company had revenue of more than $375 million in the past
12 months, and will have more than $125 million in cash.
"It's safe to say we should see enhanced revenue growth, which should be
accretive (to earnings per share) in the end," Waters said. "We think it'll be
accretive in the first full year of operations." The transaction, which has the
approval of both boards, is expected to close in 90 days.
According to Zacks Investment Research, two analysts covering Micro
Focus expect the company to earn $1.38 an American Depositary Share
for the fiscal year ending in January 1999, compared with 89 cents for the
latest fiscal year.
Micro Focus has been growing at about 35% a year, Waters said. |
