Middleware and enterprise application integration company Level 8 Systems Inc said Wednesday that it has acquired fellow EAI vendor Template Software Inc for $49m in cash and stock. The price – $4 in cash plus $3.90 worth of Level 8 common stock – represents a 40.4% premium over Template’s closing price of $5.625 Tuesday before the deal was announced.
Level 8 says the combination of Template’s ERP integration, component development, high performance data integration engine, and business workflow products with Level 8’s middleware, EAI, and application development technologies will allow it to offer a one-stop shop for customers rolling out e-business strategies. The acquisition also gives Level 8 a stronger position in the government, telecommunications, and financial services markets, where Template has a strong customer base.
Terms of the deal state that the actual number of Level 8 shares to be exchanged will be based on the average trading price prior to closing, but will not be less than 0.2838 shares per Template share or more than 0.3672 shares. The deal will be accounted for as a tax-free pooling of interests. After the deal closes, Level 8 says it will nearly double in size to 500 employees worldwide.
