Friday, July 31, 2009

Micro Focus Finalizes Borland Acquisition with Sweetened Deal

By Jeffrey Schwartz07/29/2009

Two months after agreeing to acquire Borland Software, Micro Focus last week upped its offer after shareholders balked at the initial agreement of $1 per share. After rejecting a second bid of $1.15 per share, Borland accepted Micro Focus' $1.50 per share offer, valuing the deal at $113 million. The transaction closed Monday night.

The acquisition of Borland comes nearly two months after Micro Focus bought Compuware's Quality Solutions Business. Both acquisitions position Micro Focus as a key provider of application testing software. 

By acquiring both companies, Micro Focus is looking to take on Hewlett Packard, who is the leading provider of application testing tools with its HP Quality Center based on technology it acquired from Mercury Interactive in 2006. "HP is the 16 ton gorilla in this space," said Ovum analyst Tony Baer.

It remains to be seen what Micro Focus will do with the remainder of Borland, such as Borland Management Solutions but Baer said he is doubtful Micro Focus will invest much in it moving forward. "Micro Focus was very blunt about the fact that this deal was all about QA, with both Borland and the Compuware tools," he said. Likewise, he predicts Borland's source code management tools will likely be put on maintenance.

The company declined to comment other than to say it will provide more information after its first quarter earnings release August 12.

Borland Launches Requirements Management Tool‘Harry Potter And The Half-Blood Prince’ Stars Get Over Kissing Qualms