Attachmate to acquire Novell for $2.2bn

Attachmate, a provider of terminal emulation and application integration products, has agreed to acquire struggling software infrastructure company Novell for $2.2 billion.

Seattle-based Attachmate specialises in software that helps businesses manage applications running on legacy mainframe systems. It also sells application security monitoring software, under the brand NetIQ, and other applications integration tools. Attachmate is privately owned by a US investment consortium.

Massachusetts-based Novell, which distributes the SUSE Linux OS as well as selling identity management software, has struggled of late. In its most recent financial quarter, revenues fell 8% year-on-year to $199 million. The company blamed the decline on speculation surrounding its future ownership.

Attachmate will operate Novell and its SUSE Linux division as two separate business units.

Novell has also agreed to transfer "certain intellectual property assets" to CPTN Holdings, a consortium of technology companies led by Microsoft, for $450 million.

"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," Novell CEO Ron Hovsepian said in a statement.

Rumours of Novell being acquired have been circulating for much of 2010. In March, venture capital provider Elliott Associates made an unsolicited offer of approximately $2 billion to take Novell into private hands. At the time, Novell’s board said that the bid undervalued the company’s "growth prospects".

Since then, whispers that Novell was to be acquired have only grown louder as the company’s revenues continued to falter. In September, the Wall Street Journal reported that Novell was in advanced talks over a sale to virtualisation software provider VMware.

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

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