The buyout, which will take Novell private, has been a source of speculation for months since Elloiot Associates announced their intention to buy Novell in March 2010 for $2Bn. Since that announcement, revenues year-over-year continued to lag each quarter until Novell’s fiscal year end, October 31, 2010.
“The company started looking at strategic alternatives including a sale after rejecting a $2 billion takeover offer in March from shareholder Elliot Associates LP as inadequate. Attachmate, whose owners also include Francisco Partners and Thoma Bravo, said Novell products will complement a portfolio that includes other technology assets”, BusinessWeek reports.
Not surprisingly, Novell stock is up today, currently 36cents over its close last Friday, although it likely won’t exceed the $6.10/share selling price that Attachmate has agreed to spend on Novell.
Attachmate, a comparatively unknown company, has about 900 employees worldwide compared to Novell’s 3,500, and generated $300MM in revenues last year compared to Novell’s revenues which are approximately 3-4x that amount annually, though earnings have been down repeatedly in the last few years, some speculating that the economy, especially weakness in the financial sector, in which Novell’s security and identity products are popular, has dealt hard blows for the company to recover from.
Shira Ovide at the WSJ notes that Elliot may have forced this transaction to go through, but didn’t get rich on the deal.
Of course, the rumors are flying in the Linux community already about what this may mean for the open source software platform, especially since Microsoft has also tossed in half-a-billion for yet-to-be-named technology assets.