Index Technology Inc, in which IBM holds an equity stake, has a letter of intent to be acquired by Sage Software Inc, Rockville, Maryland via a pooling of interests in which Index holders would get 1.059 shares of Sage common for each Index, and one Sage preferred for each Index preferred. After the merger, Sage holders will own about 55% and Index 45% of the combined firm. Sage chief Kevin Burns would be chairman and chief executive of the new company with Sage boss Richard Carpenter vice-chairman and chief of strategy and product architecture. Index is one of IBM’s AD/Cycle partners but unlike sibling Knowledgeware Inc, does not offer code generation as part of its life cycle software. The upshot of the merger will presumably be that the Excelerator analyst workbench and design workbench will be developed to embrace Sage’s Application Production System workstation, which is itself built around the Micro Focus Cobol/2 Workbench and generates Micro Focus Cobol (CI No 976). The lack of its own code generator was perceived by the market as a weakness for Index and this merger should give it added credibility as an AD/Cycle partner, since it now has workbenches for every stage of the life cycle, making it easier to achieve IBM’s ideal of on-line system engineering integration based around the Repository. However, it is unclear where this merger leaves Index’s interface deal with Pansophic Inc to link Excelerator into the Telon code generator (CI No 779). The Cambridge, Massachussetts-based Index also said it expects to report a loss for the fourth quarter of about $1.2m to $1.7m on sales of $11m to $12m. In the 1989 fourth quarter, it reported $464,000 net on sales of $11.4m.
