E-business system management company NetIQ Corp. (NTIQ) has agreed to buy WebTrends Corp. (WEBT), which tracks Web surfers' online behavior, for about US$1 billion in a stock transaction.
WebTrends shareholders will receive 0.48 of a share of NetIQ stock for each share of WebTrends, under the deal's terms. NetIQ closed Tuesday on the Nasdaq exchange at $76.69 per share, valuing WebTrends at $36.81 a share. WebTrends closed at $26.94 Tuesday, but shot up to $32.78 in after-hours trading. The boards of directors for both companies have approved the merger.
The merger is financially compelling: the combined company will have greater scale, a market capitalization of over $4 billion, and will have a wider product offering, NetIQ chief executive officer Ching-Fa Hwang said during a conference call on Wednesday morning. The merger will be immediately accretive to NetIQ's earnings per share, he said. WebTrends had a net profit of $5.8 million on revenue of $40.0 million over the previous nine months, while NetIQ had a loss of $69.4 million for the year 2000 on revenue of $47.9 million.
WebTrends' software examines the behavior of Internet visitors on Web sites by tracking their "clickstream" -- the manner in which people look through a site, how long they linger, and what links are more attractive than others. It also develops and sells a variety of Internet-based systems including Web servers, firewalls, proxy servers, media servers, e-mail servers and database systems.
"The opportunity we've identified is to create a larger company in the market with a wider distribution channel," said Elijahu Shapira, WebTrends chairman and chief executive officer.
NetIQ provides e-business infrastructure management and monitoring software, mostly for Microsoft Corp.'s Windows NT and Windows 2000-based systems and applications. Analysts noted during the conference call that there is minimal overlap in the product line of both companies. Company executives consider their disparate product offerings an asset, allowing the companies to merge without competing with each other's products in the market.
NetIQ, in San Jose, California, can be reached at +1-408-330-7000, or at http://www.netiq.com/. WebTrends, at Portland, Oregon, can be reached at +1-503-294-7025 or at http://www.webtrends.com/.