May 06, 2009, 10:38 AM — The company has also snapped up the application testing division of Compuware for $80 million
By Peter Sayer
IDG News Service (Paris Bureau)
PARIS (05/06/2009) - Micro Focus International plans to beef up its range of software quality assurance tools with two acquisitions it announced Wednesday.
It has agreed to buy Borland Software, a developer of application lifecycle management tools, for US$75 million, and in a separate deal has also agreed to buy Compuware's application testing and automated software quality business unit for $80 million in cash.
Borland is a shadow of its former self: in May last year it sold Codegear, its software development tools division that published JBuilder, to Embarcadero Technologies for $30 million, and in January it lost its CEO Tod Nielsen to VMware, where he became chief operating officer. Last year it reported a net loss of $216 million on revenue of $172 million from its remaining application lifecycle management activities.
Micro Focus, a developer of enterprise application modernization and management software based in the U.K., hopes the purchases will help it to enlarge its share of the automated software quality assurance market, which it says is worth over $2 billion annually.
Buying Borland will allow Micro Focus to address a broader market, and bring it new customers, particularly in the U.S., the company said. It also expects to be able to cut costs significantly by eliminating duplication in the two companies' back-office functions and IT systems.
As for the Compuware products Micro Focus is buying, it will sell those alongside its existing automated software quality product, Data Express. From last April through this March, Compuware generated around $74 million in revenue and $5 million in pretax profit from its application testing and automated software quality business, Micro Focus said.
Borland has the approval of both companies' boards of directors, but must still win over regulators and its own and Borland's shareholders. It expects to complete the Compuserve deal by the end of June, and the Borland acquisition late this quarter or early next.