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July 12, 1987


By CBR Staff Writer

The proposed acquisition by Borland International Inc of Ansa Software Inc (CI No 721), raises intriguing new possibilities for the combined companies – but it also leaves open a number of unanswered questions. Some 18 months ago, Ben Rosen was in London for the introduction of Ansa’s Paradox database manager onto the UK market, and at that time revealed boldly that his Sevin-Rosen venture capital partnership had injected more money into Ansa than they had into their two top moneyspinners, Compaq Computer and Lotus Development, combined (CI No 356). At that time, Rosen clearly saw Ansa as another superstar in the Lotus mould, so why is he selling the company out now? Ansa made a pre-tax loss of $1.4m on sales of $8.1m in calendar 1986, but looks to reach breakeven this quarter. On that basis, and assuming that breakeven this quarter leads to profits next quarter, that implies a reasonable platform for an initial public offering in the first half of next year. Clearly, however, Ansa would not have had nearly a strong enough story to tell to win superstar status and to put it up alongside Rosen’s other success stories – otherwise it would not now be selling out to Borland. Indeed there is no information in the statement on how much venture capital Ansa has absorbed in total – but since it raised another $6.5m and turned a $2m loan into equity in the first half of this year, the total raised is unlikely to be too far shy of the $37.4m at which Borland’s offer values the company. It arguably represents a good diversification for Borland, which has a firm image as a stack’em high, sell’em cheap vendor of mass market software – an image a little undeserved in that there is no doubt about the quality of its low-price products. But the market for $25 to $100 compilers and utilities is a far cry from the corporate market that the Paradox database management system selling for $495 to $995 has to crack. On its own, the acquisition looks only a modestly good one for Borland, but the company does have a strong reputation for spotting good products early and buying rights to them, and it is reasonable to assume that the company has its eye on other up-market products that can be sold through the new Ansa division of Borland that will be created if the acquisition goes through. The Ansa division is to retain – at least to start with – its present headquarters in Belmont, California; it has 103 employees, 34 in other US sales offices and in London. Its president, Ron Posner, will additionally become Borland’s executive vice-president for sales.

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