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NEON Systems Acquires ClientSoft

Published
  • December 17 2004, 1:00am EST

NEON Systems Inc. announced it has acquired ClientSoft Inc., a privately-held mainframe integration software vendor based in Miami, known for its leadership in secure, high-performance legacy integration solutions for Microsoft .NET, Java and Web services environments. ClientSoft introduced the industry's first mainframe Web services solution in December 2001 and is acknowledged by most major industry research firms as the category leader in mainframe Web services.

NEON's acquisition of ClientSoft brings together two of the industry-leading mainframe Web services products, ClientSoft's ServiceBuilder and NEON's Shadow z/Services, providing customers and prospective customers with the most robust set of solutions to support Service-Oriented Architectures (SOA) and composite application development. Having already established itself as a leader in real-time business event management with its Shadow z/Events product, the company now has a clear technological advantage over its competitors with the most advanced and complete unified platform for mainframe integration.

According to NEON's management, the acquisition will combine the capabilities of the acknowledged leader in mainframe Web services to NEON's existing Web services capability, providing the most complete, market-tested solution for customers to re-purpose mainframe application logic or screens to rapidly support new business requirements. Additionally, it will provide NEON's existing 300 mainframe integration customers with immediate access to an expanded range of industry-leading Web services and consulting services as well as add an additional 180 high-quality customers to NEON's roster, expanding its ability to cross-sell Shadow technology supporting real-time event integration and SQL access to mainframe data sources.

The Asset Purchase transaction closed on Dec. 13, 2004. NEON paid ClientSoft a cash purchase price of $10.5 million and issued to ClientSoft a warrant to acquire up to 1,125,000 shares of NEON common stock at an exercise price of 1.33 times the closing price of NEON common stock on Dec. 13, 2004. NEON also agreed to register the underlying shares of common stock within the next year. NEON acquired substantially all of the assets of ClientSoft Inc., including its ClientBuilder and ServiceBuilder product lines, customer contracts, maintenance obligations and ClientSoft employees.

Effective upon closing of the transaction, the NEON Board of Directors voted to expand the number of directors on its Board from five to six directors and appointed William W. Wilson III, president and CEO of ClientSoft, to fill the open board seat.

 

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