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Technology Stocks : Network Associates (NET) -- Ignore unavailable to you. Want to Upgrade?

To: Wigglesworth who wrote (2258)	3/25/1998 10:15:00 AM
From: Wigglesworth	Read Replies (1) \| Respond to of 6021

NETA Employee Detailed Larson's Sadistic Assault Network Associates Agrees to Buy Help-Desk Firm Magic Solutions An INTERACTIVE JOURNAL News Roundup Network Associates Inc., which has been on a software shopping spree, confirmed Tuesday that it has agreed to purchase Magic Solutions International Inc., a privately held developer of help-desk software, for $110 million. Network Associates, formed by the $1.3 billion merger of McAfee Associates Inc. and Network General Corp. in December, said Magic, of Paramus, N.J., targets customers looking for lower-end help-desk software. The software that help-desk companies produce goes by many names and the firms vary in their specialties. Some focus on developing "sales-force automation" or customer-support programs, while others target different niches. The market is consolidating rapidly. Magic Solutions last year acquired sales-force automation software company WinSales Inc. to add features to its SupportMagic family of products. In general, help-desk software is used by companies to track things such as incoming calls and requests, how well equipment is working and how well and how quickly problems are resolved. Network Associates, of Santa Clara, Calif., last month announced a $297 million stock deal to acquire fellow network-security software developer Trusted Information Systems Inc. Soon after its creation, Network Associates acquired Pretty Good Privacy, a big player in encryption software. It also acquired Helix Software in a stock deal worth $27 million. All the deals fit in with Network Associates' strategy of integrating product lines in the areas of security, network monitoring and desktop support systems. Network Associates has made no secret of its desire to feast on smaller software companies. Last month, the company increased its acquisition war chest to about $650 million with a $300 million private offering of convertible bonds. Network Associates executives have told analysts the company could spend as much as $450 million of that cash reserve on acquisitions. Some analysts think the primary rationale behind the McAfee-Network merger was to create a vehicle for consolidating very fragmented segments of the software industry. Gerard Klauer Mattison & Co. analyst Arthur Newman said Magic Solutions' software will help Network Associates capture customers at the lower end of the market, which it may eventually be able to move to higher-end products. Network Associates is currently positioned at the middle-to-upper end of the market. Network Associates has been bundling help desk software with network-management software to create what it calls a service-desk product. The idea is to design software that can diagnose and fix computers remotely to save time and money. Meanwhile, Network Associates executives see the acquisition of Magic Solutions as an outright challenge to Remedy Corp., the leader in the help-desk arena. Zach Nelson, the head of Network Associates' help-desk division, said that for the past 18 months Magic Solutions has been pressuring Remedy in the market for smaller customers, while Network Associates has been pressuring Remedy in the market for big customers. "It's been sort of a squeeze play," he said. "Now, by joining forces, we can put the squeeze on them from the low end and from the high end."