PROVO — Novell Inc. on Monday announced plans to acquire Cambridge Technology Partners Inc., a consulting company and systems integration service, in an all-stock deal valued at $266 million.
That price is based on Novell's March 9 share price of $6.06 and could fluctuate. Novell stock was down 25 cents at $5.56 in early trading Tuesday.
Novell will exchange .688 shares of its common stock for every outstanding share of Cambridge, which will become a wholly owned subsidiary. The transaction should close around June, but it's subject to approval under federal antitrust regulations and will require Cambridge shareholders to sign off on it.
"We're doing exactly what we said we would do," Novell chairman and chief executive officer Eric Schmidt said during a teleconference Monday with analysts and reporters. "This advances Novell's transition to very much becoming a network services company."
He called the deal "one of the last great opportunities in the networking area" and said the company has an aggressive business objective to "make certain Novell remains and continues to expand its leadership in networking in a fundamental and meaningful way."
One of Novell's goals has been to have consulting services account for 30 percent of its business by 2002. The company already had hired more than 300 consultants and created its own consulting organization, but it needed a broader base of consultants to reach that goal, Schmidt said. Cambridge provides that.
With Cambridge, Novell plans to offer a wide range of e-business-related consulting services.
There will be some internal restructuring. While Schmidt will retain his chairmanship at Novell, Jack Messman, president and chief executive officer of Cambridge, will become Novell's new CEO. He's no stranger to the company, having served on Novell's board of directors. Schmidt also will become chief strategist for the company.
"The new company will be the model for a new generation of e-solutions companies that offer end-to-end solutions that include technology products and services, foundation services and enterprise applications with business solutions to the maximum benefit of our mutual customers," Messman said.
He added that Cambridge would continue to do business as it has in the past. "We will maintain our objective and independent point of view to the software choices that solve customer problems in the best possible way. This is a hallmark of the way we do business — sharing risk and guaranteeing delivery."
Novell provides software that allows companies to run different types of networks, from the Internet to intranets and extranets, corporate and public, with appropriate security. The company's vision has been to build the foundation of a single global network that supports new applications and forms of business, something Schmidt has called "one Net."
The decade-old Cambridge, based in Cambridge, Mass., has 3,400 employees in 19 countries and offers its customers strategic and management consulting, along with systems integration services to help them become e-businesses.
Though complementary in nature, the two companies have excelled in largely unduplicated areas. Cambridge's specialties have included financial services, communications, energy and manufacturing, while Novell's network expertise includes business, government and education markets, Schmidt and Messman agreed.