Progress Software Corporation, a supplier of leading technology to develop, deploy, integrate and manage business applications, has agreed to acquire substantially all the assets and certain subsidiaries of DataDirect Technologies Limited, a privately held company specializing in standards-based data access components for software developers. The purchase price, net of cash and subject to certain balance sheet adjustments as of closing, is approximately $88 million in cash. The new business is expected to be immediately cash flow positive, dilutive to earnings in the first year and accretive thereafter. Excluding amortization of purchased intangibles and one- time acquisition-related charges, the acquisition is expected to be immediately accretive.
"Progress Software Corporation is committed to leadership in all the markets it serves," said Joseph Alsop, CEO of Progress Software. "DataDirect adds another profitable market leader that is complementary to our existing lines of business. It also reinforces our technology leadership, which is the backbone of our success."
DataDirect Technologies is a vendor of software components for data connectivity across disparate databases and platforms via ODBC, JDBC and other industry standards. DataDirect's drivers simplify application development and support by delivering consistent data access across multiple platforms and databases, including Oracle, IBM DB2, Microsoft SQL-Server, Sybase, and Progress. DataDirect's products are embedded in the products of over 250 top software companies and the applications of thousands of large enterprises, including 96 of the Fortune 100.
DataDirect recently expanded its product line to include 100 percent managed ADO.NET providers and is already the leading supplier in this emerging market. In addition, DataDirect Connect for SQL/XML gives Java developers a consistent, standards-based approach to easily exchange data between XML and relational formats across all major databases. With DataDirect Connect for SQL/XML, developers can use SQL queries to create XML documents from relational data or consume XML documents and update relational data.
"DataDirect's core strength is its focus on reliable, very high performance, embeddable software components that support true and consistent implementations of industry standards. DataDirect stays at the forefront of data access through continuous innovations, such as its 'wire protocol' technology that allows applications to talk to databases at the most basic level possible. Innovations like these provide dramatic performance improvements and make life easier for developers," explained Alsop. "Our plan is to reinforce this focus. As part of a larger and financially strong software industry leader, DataDirect will lead the adoption of evolving data access standards, including emerging data formats such as XML."
"This deal is a win all around," said Steve McClure, a research vice president in IDC's Software Research Group. "Progress is getting a very healthy company that dominates an important niche. DataDirect gets the backing of a much larger company. The companies are a great fit together as they share the common business model of supplying other software developers with critical technology that makes their jobs easier."
"Progress Software has built solid, growth-oriented businesses with a reputation for excellent products," said Edward Peters, president and chief executive officer of DataDirect. "By becoming part of PSC, DataDirect can better serve its customers with greater investment in our products, customer support, and expanded market presence, especially internationally. Customers should expect no change in DataDirect's core business focus. We will continue to operate as a separate business offering embeddable data access components for the widest range of data sources and operating systems in the industry, including Linux and all major 64-bit platforms."
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