Merant strikes deal with NetObjects

By JAMES MCLEAN
Updated:

 

Anglo-American software group Merant has agreed to buy the enterprise division of Nasdaq-listed NetObjects for $18m (£12m) in cash. The deal also commits NetObjects' largest shareholder, IBM, to buying a small stake in Merant.

Merant chief executive Gary Greenfield said the purchase of the California-based operation, which is expected to be completed in March, broadened the group's ability to deliver web management solutions to multinational corporations and included NetObjects' Collage website software suite and approximately 40 staff.

As part of this transaction IBM, which owns 48% of NetObjects, had agreed to make 'a limited equity investment in Merant on the open market after the transaction closes'. The size of the potential IBM stake is likely to be between 1% and 5%.

Merant, which last month said it was in talks which could lead to a bid for the group, said those discussions continued and would not be affected by IBM's commitment. It said the deal was a one-off and it would not pursue further acquisitions while it concentrates on incorporating the new unit into the group.

The new division, which lost $7.6m on revenues of $10m last year, is not expected to add to the company's earnings for two years.

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