Veritas buying Precise for $537M in cash
Shades of the bubble: Software giant Veritas Software Corp (Nasdaq:VRTS) is buying Israel’s Precise Software Solutions (Nasdaq:PRSE) for $537 million cash, the companies announced today. Precise software’s CEO is the ExScite Shimon Alon, Ex STCL, STA and STE.
Veritas is paying $16.5 per share in cash, a 37% premium above Precise?s closing price of $12.05 on Wednesday. That is a handsome premium over the company’s current market cap of $357 million. Veritas, one of the world?s largest software companies, is traded at a market cap of $7.1 billion. Precise shareholders can also elect to receive up to 25% of the consideration for the deal in Veritas stock, with the remainder being paid in cash. Based on a fixed exchange ratio of 0.2365, a maximum of 7.5 million shares will be issued to Precise shareholders.
Shimon, who holds more than a million shares of PRSE is expected to scoop $17.1M following the sale.
The two companies will cooperate on providing solutions to optimize computer power by companies.
“Precise Software products proactively detect and correct the root cause of performance problems before they affect response times,” Veritas said in a statement. “This is a natural extension of our existing business.” “Veritas and Precise will provide a unique solution for IT professionals to run mission-critical applications with optimal performance and continuous availability. Industry analysts predict this market opportunity will grow to $11 billion by 2006,” the statement said.
Gary Bloom, the chief executive of Veritas, said the acquisition is strategic. Shimon Alon called it “an exciting opportunity” for the company’s shareholders and everybody else. “Veritas’ scale and global distribution will accelerate the market penetration of our industry leading application performance management solutions,” Alon commented.
Published in the Israeli economic papers TheMarker and Globes Dec 19, 2002