STOCKHOLM (03/23/2000) - Server appliance vendor Cobalt Networks Inc. today announced a definitive agreement to acquire Web-based application development software provider Chili Soft Inc. in a transaction valued at around US$70 million.
Under the terms of the agreement, Cobalt will acquire 100 percent of Chili Soft's stock as well as assume all of its outstanding stock options in exchange for 1.15 million shares of Cobalt common stock, according to a company statement.
Based on Cobalt's closing price of $60.75 at the end of trading yesterday on the Nasdaq exchange, the deal is valued at $69.9 million. The share price dropped $8.19 yesterday.
The transaction is expected to close in the second quarter, and is still subject to customary closing conditions, Cobalt said.
With the acquisition, Cobalt aims to boost its position in the hosting market which is driven by Web-based applications, Stephen DeWitt, president and chief executive officer at Cobalt, said in the statement.
Cobalt and Chili Soft are no strangers. Last month, the two companies announced a partnership aimed at delivering Linux-based server appliances for dynamic applications based on the Microsoft Corp.-backed Active Server Pages technology.
Cobalt Networks, in Mountain View, California, can be reached at +1-650-623-2500, or via the Web athttp://www.cobalt.com/. Chili Soft, in Bellevue, Washington, is at +1-425-957-1122, or at http://www.chilisoft.com/.