November 22, 2010 – Novell, a provider of computer management software, announced that its board of directors has approved a $2.2 billion buyout by investment group Attachmate Corporation.

In addition, the Massachusetts-based company stated that it has agreed to sell certain intellectual property rights to a technology consortium led by Microsoft, which an analyst said could be an indication of another deal to come.

Novell would be joined with Attachmate’s other holdings, NetIQ, a Web analytics provider, and the namesake equity firm. The company would operate Novell as two entities: Novell and SUSE, the company’s Linux-based data management and virtualization software division.   

Concurrent to the acquisition, Novell stated it would sell certain intellectual property assets to CPTN Holdings LLC, a group of tech companies led by Microsoft. That sale has a price tag of $450 million in cash, which is reflected in the merger consideration to be paid by Attachmate, according to a Novell news release.

In a news release, Ron Hovsepian, president and CEO of Novell, said the acquisition and property rights sale provided the “best alternative” for stockholders.

"We also believe the transaction with Attachmate Corporation will deliver important benefits to Novell's customers, partners and employees by providing opportunities for building on Novell's brands, innovation and market leadership," Hovsepian said.

Attachmate Corp is part of a investment group led by Golden Gate Capital, Thoma Bravo and Francisco Partners, which previously acquired NetIQ and RedPrairie.

The board of directors approved the acquisition and intellectual property rights sale, with an expected official close at the end of the first quarter of 2011. However, the deal is still subject to stockholder and other approvals.

Jonathan Penn, analyst with Forrester, says the acquisition is an acknowledgement of the investments Novell has made recently into systems management. Novell has had joint IT work in the past few years with Microsoft, though that does not fully explain the sale of property rights involved in the company’s announcements.

“My sense here is, reading the tea leaves, that [Attachmate] is not as interested in the platform side,” Penn says. “Whether this means that SUSE is basically on the table for someone like HP or IBM, that waits to be seen.”

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