Sun buys Tarantella for US$25 million

Sun Microsystems has agreed to buy Tarantella, a vendor of tools to secure remote access to applications, for about US$25 million in cash, the companies said Tuesday.

The deal still requires approval from regulators and Tarantella shareholders, but the companies expect to complete it by the end of September.

Tarantella, based in California, developed its Secure Global Desktop software to make it possible to deliver access to enterprise applications over the Web. It sells the product online, through its own sales force and through a network of resellers including, in the U.S., Tridex Systems and PrimeCare Technologies

The 81-person company was at one time known as The Santa Cruz Operation, or SCO. It adopted the name Tarantella in 2001, after selling its Unix business to the company now known as The SCO Group, also called SCO. Those Unix assets are now the subject of a protracted legal dispute between IBM and The SCO Group.

Sun purchased Tarantella, which competes with remote access vendors such as Citrix Systems, in order to bolster its SunRay thin client products, said John Fowler, executive vice president of Sun's Network Systems group. "We'll soon be able to deliver a desktop display service that delivers seamless interoperability to Windows, Linux and mainframe applications," he said, speaking on a conference call Tuesday.

Sun also plans to integrate Tarantella's software into its Solaris operating system, and to develop Tarantella products for the telecommunications and mobility space, Fowler said. He declined to say when these developments are expected to occur.

Directors and executives at Tarantella, between them holding 4.7 percent of Tarantella stock, have already accepted the deal, according to a filing with the U.S. Securities and Exchange Commission. That filing also indicates that Tarantella has agreed not to solicit other bids for the company, and that it will pay Sun compensation of US$1.2 million if it terminates the merger.

Sun, of Santa Clara, California, will pay Tarantella up to US$2 million in six stages while the deal is closing, in return for licenses and engineering support from Tarantella for its Secure Global Desktop software.

Tarantella cancelled a conference call previously scheduled to take place Thursday, after the release of its financial results for the second quarter of its fiscal year 2005.

The company lost just under US$1.3 million during the quarter that ended Dec. 31, 2004, the most recent one for which results are available.

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