OnDisplay will acquire privately held Oberon Software Inc. in a US$181 million stock-for-stock purchase that will yield a combined offering for e-business infrastructures, officials at the companies announced today.
To close the deal, OnDisplay will be issuing approximately 1,922,500 shares of common stock at $181 million for the outstanding shares of Oberon; Oberon's outstanding options will also become the obligation of OnDisplay. The acquisition is expected to be complete by the end of the current quarter. The combined name for the company will be OnDisplay -- the Oberon name will go away, Oberon officials said.
Oberon's e-Enterprise integration software will become essential components of OnDisplay's CenterStage eIntegrate and CenterStage eBizXchange Internet portal construction infrastructure products.
The unification of the two companies is a far better option than a business partnership, said Kimberly Knickle, a senior analyst at AMR Research, a Boston-based market research company.
"Customers don't want to purchase products from five different businesses to build an e-business infrastructure," Knickle said. Instead, users prefer a one-stop shopping approach, she said.
The recent spate of mergers and initial public offerings in this space also influenced Oberon's decision to merge, said Knickle.
"You could see how quickly they (Oberon's competitors) were ramping up," Knickle said. "I'm sure that put pressure on Oberon."
Joe Chappell, president and chief executive officer of Oberon, acknowledges that the market has been heating up for Oberon. "I think the pace at which companies are moving and the resources they need to compete certainly mean that the clock is ticking louder," Chappell said.
Oberon Software Inc., in Cambridge, Massachusetts, is at http://www.oberon.com/. OnDisplay, in San Ramon, California, is at http://www.ondisplay.com/.