The root-and-branch reorientation and the recovery at Borland International Inc are so far advanced that the company now feels fit and able to start thinking about acquisitions rather than divestments, and the company has reached, definitive agreement to buy Open Environment Corp for about $64m in shares. Open Environment shareholders are offered 0.51 Borland share for each Open Environment share – or shares worth at least $6.50 a time – as long as Borland shares don’t fall below $12.75 or rise above $25 in which case the ratio will be re-assessed. Borland will take a charge of around $3m for the transaction against its second quarter. Open Environment’s share price crashed last month after it issued a profits warning and it ended its first quarter recording a loss of $4.05m against a profit of $174,000 in the corresponding period the previous year on turnover that dived 31% to $4.28m (CI No 2,903). Open Environment, based in Boston, a 1989 spin out from Cambridge Technology Partners Inc, admits it severely over- stretched itself, failed to close some large orders on time and was operating with an unfocused sales strategy. Borland hopes Open Environment’s Entera client-server middleware will propel its Delphi, C++ and Java development environments into the enterprise space. Entera is used to link the elements used in application development, deployment and management across Unix, Microsoft and mainframe environments and runs on a variety of transports including Distributed Computing Environment (DCE). Open Environment has around 300 accounts and started life focused on DCE-based application development but re- positioned itself for three-tier development once it became clear DCE wasn’t going to take over the client/server world. At one time the company touted the fact the majority of its users were running over DCE, now it says that’s not the case. Following Open Environment president and CEO Nathan Morton’s departure last month, Philip Copeland, founder and chairman of Australian repository and tools house Jarrah Technologies Pty Ltd which OEC acquired last August is acting CEO whilst VP and co-founder Adam Honig is interim president. Borland will retain all of Open Environment’s 200- odd staff as well as its Boston, Massachusetts-based headquarters and research and development base even though it expects to eliminate the latter’s computer-based learning, Internet products and central management groups. Open Environment has 77 people in sales and marketing, 60 in support, 64 in R&D and 23 in admin. 116 are based in North America, the rest in Europe and the Pacific Rim. Borland touts the worldwide marketing channels and technical support team it picks up in the deal. It’s not clear how Open Environment’s existing relationships with companies such as Business@Web and Centura Software will be effected. Borland shares closed almost a dollar down at $15.12, Open Environment shares were down $0.62 at $7.50.
