Mercury Interactive Corp. said Tuesday that it has signed an agreement to acquire privately-held Kintana Inc. for approximately US$225 million in cash and stock, underscoring a trend towards consolidation in the enterprise software market.
Application delivery and management software maker Mercury Interactive said it was scooping up Kintana, which makes IT governance software, in an effort to strengthen its position by allowing it to offer more complete offerings for managing businesses.
The buy comes on the heels of enterprise software maker Oracle Corp's headline-grabbing bid to acquire industry rival PeopleSoft Inc., and PeopleSoft's planned buy of J.D. Edwards & Co.
"Our industry is at an inflection point," Mercury Interactive Chairman, Chief Executive officer (CEO) and President Amnon Landan said in a statement released Tuesday. "CIOs (Chief Information Officers) are grappling with how to manage costs, risks and performance against a backdrop of business complexity."
Sunnyvale, California-based Mercury Interactive said the combination of its application delivery software with Kintana's compliance products will give technology executives more complete business management offerings.
The transaction is worth US$100 million in Mercury Interactive stock and US$125 million in cash and is expected to close in the third-quarter of 2003, pending antitrust clearance and stockholder approval, Mercury Interactive said. The company will also assume all of Kintana's unvested outstanding options.
Kintana's 210 employees will constitute a new business unit of Mercury Interactive. Sunnyvale, California-based Kintana reported revenue of US$44.5 million for 2002.