Serena, Merant to merge

Combining wares in ECM (enterprise change management), Serena Software on Wednesday agreed to acquire U.K.-based Merant for the equivalent of US$380 million in cash and stock, pending regulatory and Merant shareholder approvals.

The boards of both companies reached agreement on the transaction, which the companies said would create the second-largest provider of ECM software, serving at least 46 of the Fortune 50 companies worldwide and providing for an installed base of more than 15,000 customers. IBM Corp./Rational remains the largest ECM company, according to Serena. Serena and Merant, whose name would go away if the merger is completed, hope to complete the transaction in the April timeframe.

Change management software provides management of processes by which applications such as a trading or financial application are changed to meet new business requirements.

The combination of the two vendors, the companies said, brings together Serena's strength on mainframe platforms and Merant's distributed systems experience. Additionally, the arrangement is expected to accelerate Serena's ability to offer its application lifecycle management branded as Serena's Application Framework for Enterprises (SAFE).

"They have a number of very good products that play in spaces that we don't have and we will be using their solutions to extend ours for quite a number of areas," said Chuck Henderson, Serena director of product marketing. "In addition, they have a number of different channels which we don't have access to that we'll be able to take advantage of."

Joining the two profitable companies creates a single larger company with revenues of US$225 million, Henderson said.

Henderson said decisions have not been made yet on combining the two companies' products and on whether to discontinue Merant offerings. "We will be supporting their products going forward. The ongoing evolution of products is really impossible to tell right now," Henderson said.

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