Micro Focus Buys Borland, Compuware's ALM Business
In a move that promises to shake up the application lifecycle management (ALM) software market, Micro Focus today said it has agreed to acquire Borland Software and the ALM tools business of Compuware Corp.
U.K.-based Micro Focus is acquiring Borland for $75 million, or $1 per share, a 25 percent premium over yesterday's closing price of 80 cents per share. Micro Focus also purchased the Quality Solutions line of products and related operations from Compuware for $80 million.
Compuware said it has decided to divest its ALM business in order to focus on enterprise IT services, portfolio management and health care collaboration.
The purchases could quickly turn Micro Focus into a credible player in the software quality and ALM markets, said Bola Rotibi, principal analyst for U.K.-based research firm Macehiter Ward-Dutton.
"Clearly, Micro Focus is not leaving anything to chance by buying up two strong toolsets, complete with their development and support structures and customers," Rotibi said in an e-mail interview. "Nor, I guess, does the company want anyone else significantly disrupting its launch into this space by making a play for the other [vendor] if it didn't acquire both."
Micro Focus CEO Stephen Kelly cited "strong growth potential" in the ALM market. "Our successful track record of five effective integrations during the past three years equips us well to rapidly harness the benefits of this proposed acquisition," Kelly said in a statement.
For Borland, the acquisition should officially signal the end of one of the early pioneers in the arena of PC-based software development and tooling. The company that delivered the first integrated development environment (IDE) and produced luminaries like Philippe Kahn, Brad Silverberg and Anders Hejlsberg had already shed most of its connections to its developer past.
In May 2008, Borland sold its CodeGear developer products group to database tools vendor Embarcadero Technologies for $23 million.
Sparking further questions about Borland's future were the abrupt departures of CEO Tod Nielsen and Senior Vice President of R&D Peter Morowski in January, during which time the company also laid off 15 percent of its workforce.
The writing was on the wall for Borland, Rotibi said. "Borland's acquisition has been in the cards for some time, certainly for the last couple of years and even more so with the sale of its tools division, CodeGear, to Embarcadero last year, and its poor share price."
Michael Desmond is an editor and writer for 1105 Media's Enterprise Computing Group.