Solution 6, Elite merger dropped
- 22 May, 2000 12:01
The embattled Solution 6 has suffered yet another setback to its expansion plans with the termination of its planned merger with US-based Elite Information Group, the third collapse of a planned acquisition by the software company this year.
Solution 6 and US legal software developer Elite Information Systems finally acknowledged defeat when they announced their $A150 million merger agreement had been terminated in the face of continued opposition from the US Federal Trade Commission.
Earlier this month the FTC's Bureau of Competition advice said it would recommend a challenge to the deal, arguing that it would be anticompetitive.
Solution 6 had to extend the offer several times for the FTC review, which came after a US law firm filed a class action.
Solution 6 CEO Tom Montgomery said the company was disappointed the merger had not come off because Solution 6 and Elite had been viewed as a "very clear, strong and strategic fit".
Elite would have given Solution 6 critical mass in the US, with forecast revenue of $100 million next financial year.
Meanwhile, the future of Solution 6's working relationship with Telstra, which holds a 25 per cent stake in the software company, is still to be confirmed.
While Telstra has indicated it will press ahead with the sale of certain e-commerce assets to Solution 6, it was confirmed this week that key Telstra executive Ted Pretty would not, as earlier expected, take on the role of Solution 6 chairman.