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Gold/Mining/Energy : Jetform-FORM -- Ignore unavailable to you. Want to Upgrade?

To: Midas who wrote (406)	3/8/1999 8:04:00 AM
From: Chris Stovin	Read Replies (1) \| Respond to of 530

Saturday 6 March 1999 PC DOCS will Hum new tune Takeover puts heat on Ottawa players Cognos, JetForm Bert Hill The Ottawa Citizen With files from Bloomberg News and Dow Jones The merger of two major Toronto-based software companies could turn up the competitive heat on local players. Hummingbird Communications Ltd. announced yesterday it will take over PC DOCS Group International Inc. to create a company with more than $335 million in sales. The deal, if approved by shareholders, moves the combined company close behind Corel Corp. and Cognos Inc., two Ottawa-based software companies with sales respectively of $379 million and $374 million last year. Only Geac Computer Corp. of Markham, with sales of $646 million last year, is bigger among independent Canadian software companies. Hummingbird plans to offer customers an Internet portal later this year that will provide a point of reference on desktops to manage and analyze information on costs, competitors and customers. "Hummingbird's goal is to become the leading enterprise knowledge management company," said chief executive Fred Sorkin. "Nobody will have the products that we will have to offer." Paul Bradley, an analyst with Cannacord Capital Corp. said, "Other companies are going to have to pay attention, because a company with these resources will have more power to set agendas. The merger is another sign we are into a consolidation trend in the industry. " More significantly, the new company is expected to increase competition in two sectors led by Ottawa companies: Cognos in business intelligence software and Jetform Corp. in business form software. Mr. Sorkin said the new company plans more acquisitions to strengthen its product offerings. One target is workflow software -- Jetform's domain -- and another is information extraction and manipulation software. With its stock severely depressed by a sharp decline in sales, JetForm could be vulnerable to a takeover bid. "JetForm is pretty cheap at today's prices." said Mr. Bradley. Hummingbird officials refused to discuss the possibility, and PC DOCS vice-president Michael O'Connor Clark played down the issue of challenging JetForm. "Our markets are more complementary than competitive." Hummingbird vice-president Barry Litwin said Cognos has stuck to the business intelligence segment while the newly merged company will provide a much wider service for customers. Both merging companies have a business presence in the region. PC DOCS bought troubled Fulcrum Technologies Inc. last year and Hummingbird bought Andyne Computing Ltd. of Kingston. Yesterday's deal for about $235 million in stock gives Hummingbird a broader array of programs to manage databases. Hummingbird's connectivity software lets computers share programs and access files such as word processing documents and Web pages. PC DOCS software helps computers organize and retrieve documents from databases. The combined company will have more than 1,500 employees and 2.5 million worldwide users, according to Ruby Osten, president and chief executive of PC DOCS. The purchase is expected to close by May -- though it must get past skeptical shareholders and analysts. Hummingbird fell 11 per cent to $25.50 on the TSE yesterday, while PC DOCS fell nine per cent to $7.55. The deal comes shortly after PC DOCS rejected bids for its assets from Open Text Systems of Waterloo and Solutions 6 Holdings Ltd. of Australia. Hummingbird, which had a 27-per-cent increase in first-quarter profit to $8.6 million, said in January it will use its $128 million in cash for acquisitions. The cost of the merger will reduce its profits by about 10 per cent this year but could increase profits in the fiscal year beginning in October. "Once again Hummingbird has deferred profit growth to the future, and that is a story shareholders have heard before," Mr. Bradley said Analyst Rob Kugel of First Albany Corp., said it is logical for business intelligence to team up with knowledge management. But he believes it will be 18 to 24 months before customers will want to go to one vendor for both.