Rational Software Corp said Tuesday it will acquire privately- held embedded software tools company ObjecTime Ltd of Ottawa, Canada in a cash-and-stock deal worth roughly $37.5m. Terms of the deal call for Rational to hand over $8.9m in cash and issue 364,000 shares of Rational common stock – worth about $16.2m based on Tuesday’s closing price. In addition, Rational will assume ObjecTime Limited stock options that will convert into 368,000 Rational stock options at an average exercise price of $10.87, for a net $12.4m outlay.
The two companies have worked together since 1997, integrating their respective technologies, Rational Rose and ObjecTime Developer, to create Rational Rose RealTime – which Rational bills as a comprehensive UML engineering tool, specifically optimized for developers building embedded software for the e- infrastructure and e-devices markets. Rational’s and ObjecTime’s mutual customers include Nortel, Lucent, Ericsson, Motorola, Alcatel and Nokia. Prior to Tuesday’s announcement, Rational already held a 12% stake in the Canadian company. The acquisition will be accounted for as a purchase and is expected to close in the March quarter, Rational said.
