PROVO — Novell Inc. on Monday said it has entered into a definitive agreement to acquire SilverStream Software Inc. in a deal valued at about $212 million.
SilverStream, based in Billerica, Mass., is involved in Internet services-oriented application development.
Novell said the acquisition is part of its plan to be a leading force in the commercialization of new Web services. The acquisition is expected to expand Novell's ability to enable customers to quickly develop business applications that use the latest Web technologies while leveraging existing information technology investments.
"Novell is now well-positioned to be a leader in the emerging and fast-growing market for Web services solutions," said Jack Messman, Novell's chairman, president and chief executive officer. "With Novell and SilverStream technologies, we will provide customers an ideal architecture to build out their next-generation systems, helping them deploy new technologies at low cost while getting the full value from prior IT investments.
"We promised we'd move aggressively into the Web services space. With the acquisition of SilverStream, we will have not only achieved that goal, we will have jumped ahead of the competition. By providing the next generation of Web services solutions to our customers, we move Novell further along the path toward growth and profitability."
Under the agreement, Novell will acquire all SilverStream outstanding shares at $9 per share, a premium over SilverStream's Friday closing price of $5.14. Novell expects SilverStream's balance sheet to have about $100 million in cash, yielding a net cash outlay by Novell of about $112 million.
The boards of directors of both companies have approved the deal, which is subject to regulatory and other standard approvals. The tender offer requires that at least a majority of the fully diluted shares be tendered. The acquisition likely will close in July with an acceptance of the tender offer by shareholders representing 90 percent of SilverStream shares. If less than 90 percent are tendered, a formal meeting of SilverStream stockholders would be called to approve the transaction, and the acquisition likely would close during Novell's fourth quarter.
SilverStream will become a wholly owned subsidiary of Novell, with its eXtend product line rebranded under the Novell name. SilverStream offices will remain in Massachusetts.
Novell said it expects SilverStream to take away from its earnings in fiscal 2003 and add to earnings in 2004. It potentially could contribute about 1 percent to total Novell revenue in fiscal 2002.
"By bringing the capabilities of SilverStream, Cambridge and Novell together, we'll have the pieces in place to deliver on our one-Net vision of a world where resources of all types can be securely managed and utilized across networks of all types, all working together freely," said Chris Stone, vice chairman at Novell.
Novell stock was priced at $3.35 early Monday, up 10 cents from Friday's close. In the past year, the price has ranged from $2.96 to $5.79. SilverStream stock was up 73 percent to its highest price in the past year, climbing $3.77 to $8.91 early Monday. In the past year, the stock has been as low as $3.15.
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