Software firm Novell, Inc. (NOVL) Monday announced a definitive merger deal to be acquired by privately held peer Attachmate Corp. for $6.10 per share or about $2.2 billion in cash.
Bellevue, Washington-based Attachmate is owned by an investment group led by Francisco Partners, Golden Gate Capital and Thoma Bravo. It is one of the largest PC software companies in the world, with offices in more than 50 cities in North America and in 30 countries.
Novell helps organizations to securely deliver and manage computing services across physical, virtual and cloud computing environments through solutions for identity and security, systems management, collaboration and Linux based operating platforms. In fiscal 2009, Novell generated revenues of $862.19 million.
Novell's 2010 fourth-quarter results are set to be announced on December 2. In its recent third quarter, the Waltham, Massachusetts-based company posted GAAP net income of $16 million or $0.04 per share on revenues of $199 million.
Novell said the deal price represents a premium of 28% to its closing share price on March 2, the last trading day prior to the public disclosure of investment fund Elliott Associates, L.P.'s proposal to acquire Novell for $5.75 per share. The price also represents a 9% premium to Novell's closing stock price on November 19.
Novell rejected Elliott's offer on March 20, calling it inadequate and saying it undervalued the company's franchise and growth prospects.
Attachmate intends to operate Novell as two business units: Novell and SUSE. Upon the closure of the deal, Attachmate will manage a brand portfolio consisting of Attachmate, NetIQ, Novell and SUSE. Under the deal, Elliott Management Corp., one of Novell's largest shareholders, will become an equity shareholder in Attachmate.
Novell also stated that it has reached a definitive agreement for the concurrent sale of certain intellectual property assets to CPTN Holdings LLC, a consortium of technology companies organized by Microsoft Corp. (MSFT), for $450 million in cash. This amount is reflected in the merger consideration to be paid by Attachmate.
The merger transaction is conditioned upon the concurrent closing of the sale of intellectual property assets to CPTN. Novell currently expects that both transactions will close in the first quarter of 2011.
Commenting on the deal, Ron Hovsepian, president and chief executive officer of Novell, stated, "After a thorough review of a broad range of alternatives to enhance stockholder value, our Board of Directors concluded that the best available alternative was the combination of a merger with Attachmate Corporation and a sale of certain intellectual property assets to the consortium."
Credit Suisse, RBC Capital Markets, Goldman Sachs and Citadel Securities are providing the financing to Attachmate.
Shares of Novell are currently trading at $5.95, up $0.36 or $6.44%, on a volume of 88.53 million shares. The company's share trading was halted earlier today, pending the acquisition news.
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