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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: AmericanDane who wrote (12048)	10/9/1998 8:03:00 AM
From: RDH	Respond to of 14631

Generally, I am not much for acquisitions -- usually they are a mistake, but in this case it is truly something that is in the best interest of Red Brick shareholders and Informix shareholders and Red Brick customers. Red Brick couldn't have survived much longer at the rate they are burning cash. This acquisition will allow them to continue to support their customers and allow many of the Red Brick employees to keep their jobs. Informix can turn this into a profitable situation by getting rid of most of the administrative personnel of Red Brick and using the current infrastructure of Informix to support the Red Brick products. In addition, Informix which has a rather weak sales force right now will get some pretty sharp and talented sales people -- Red Brick has a much better than average sales force. Red Brick has a similar personality to the Informix culture. Both companies are customer and service oriented (unlike, for example Oracle <disclaimer I own more Oracle stock [IN $ amount] than Informix stock -- and Oracle is slowly improving on customer focus, although they have a long ways to go>) Another plus to this acquisition, is there is a scalability problem to Red Brick data marts -- and so what is the upgrade path? -- Informix of course. As soon as the Red Brick structures start getting over 500 Gigs, it makes sense to look at using Informix instead. At what price this acquistion -- $35 million -- peanuts! No Informix investor would have questioned this a purchase 2 years ago when both companies were at $25; well, now it is even a better bargain as only .6 of an Informix share is needed for 1 share of Red Brick, and Red Brick has a large customer base now then they had 2 years ago. Take a look at current Red Brick customers -- an impressive list -- and most of these shops have little or zilch Informix presence -- many are mostly Oracle or DB2 shops using Red Brick for one or more highly focused decision support solutions. This access to these shops alone is worth $35 million, IMO. And yet even though this purchase price is almost an outright steal, it makes a lot of sense for Red Brick and Red Brick shareholders. Informix stock will rise, but more importantly if Red Brick had not been acquired they would have fizzled out sometime in the next 3 to 6 years. Another big winner is the Red Brick user -- for the life of the Red Brick database has been extended and Informix will make it relatively easy for them to migrate to Informix when the time comes. I know I sound like Pollyanna, but this is a win-win situation. - RDH.