| HOME | NEWS ALERTS | SMK RECOMMENDATIONS |
Mercury Interactive to
Buy Software-Maker Kintana for $225 Million
Unlike the spate of engagements that emerged last week, this combination doesn't involve companies trying to recover from corporate America's decreased high-tech spending.
If anything, the high-tech backlash has helped Mercury and Kintana, a pair of Sunnyvale-based firms that specialize in helping businesses make sense of all the computers, software and Internet gear that they bought during the 1990s.
Mercury's revenue last year surged 11 percent to $400 million, producing a $65.2 million profit.
The rising demand for Mercury's software has elevated the company's stock too. The shares climbed $1.71 Tuesday on the Nasdaq Stock Market to close at $42.62 -- a 44 percent gain so far this year.
Kintana says it generated $44.5 million in revenue last year. The closely held 210-employee company doesn't disclose its profits.
Mercury believes Kintana's tools will supplement its software for managing information technology departments. Kintana makes software that helps companies prioritize the importance of technology projects and create an order for getting the jobs done.
"We're all about reducing the waste and improving the benefits of information technology," said Ken Klein, Mercury's chief operating officer.
Companies across the country have been dealing with major technology headaches since they went on a spending spree to adapt to the Internet and guard against possible computer problems caused by calendar rolling over to the year 2000.
The troubles and other economic worries prompted companies to curb their technology purchases, a trend that has decimated the sales of most Silicon Valley companies.
With the high-tech market shrinking, there's an urge to merge among industry rivals.
Last week, business software maker PeopleSoft agreed to buy J.D. Edwards & Co. in a stock swap valued Tuesday at $1.8 billion, only to have the deal jeopardized by Oracle Corp.'s $5.1 billion hostile bid for PeopleSoft. Palm Inc. and Handspring Inc., two combatants in the handheld computing market, also agreed to join forces last week.
"All this consolidation is happening because there is a sense of confidence that things are about to get better," Klein said. "This all could be a harbinger of growth."