NEON snaps up Convoy

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In a move to bolster its presence in the enterprise application integration (EAI) arena, New Era of Networks Inc. (NEON) today announced it would pay $42 million in stock to acquire Convoy Corp., a privately held provider of application integration software for PeopleSoft applications.

The merger is subject to approval from Convoy's shareholders and other conditions but is expected to close by the end of this week, according to company officials. Convoy CEO John Valencia has been named as senior vice president at NEON, and Convoy will be integrated into NEON's enterprise resource planning business unit, Denver-based NEON said in a statement. There are no layoffs expected at this time, said Fred Horn, NEON's senior vice president of engineering.

Product integration between the two companies is expected quickly, Horn said.

NEON's software sends data and transactions immediately, and Convoy, which offers applications that save updates and send them over in a batch at once, can fill in some product gaps, Horn said. In addition, NEON will continue to support and enhance existing Convoy products, said Rob Theis, NEON's chief marketing officer.

Convoy is in Emeryville, Calif., and Neon is headquartered in Denver.

One analyst said today's announcement aids NEON's efforts to expand its PeopleSoft support. With the deal, NEON is "one of the leading vendors in the integration" area, said Kimberly Knickle, an analyst at AMR Research Inc. in Boston.

Knickle said corporate customers should benefit from the NEON/Convoy deal by having one company with one service team integrating the products, she said. Customers won't have to worry about gluing together multiple products from EAI vendors, she added.

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