Duquesne Systems Inc’s chairman and chief executive officer Glen Chatfield, confirmed this week that its merger agreement with Morino Associates Inc has now been formally filed at the Securities & Exchange Commission in Washington. The two comp anies signed letters of intent in December (CI No 1,077), and expect the merger to be closed at the end of March. Duquesne, of Pittsburgh, Pennsylvania, develops performance optimisation, automation, and VTAM communications system software for IBM MVS, MVS/XA and VM environments, while Vienna, Virginia-based Morino’s flagship product is the MICS data centre management system, designed for large IBM sites. Chatfield described the deal, which puts the combined value of the companies at around $400m, as unique. He stressed that there is no clear aquirer or aquiree, no plans to dis-continue existing products, and absolutely no lay-offs or forced relocations of staff envisaged. In both companies, albeit for shrewd business reasons, employee satisfaction was described as a top priority: If we take care of people, they take care of the customers, and the customers buy the products, Chatfield quipped. In financial terms, he believes that the post-merger company will be second only to Computer Associates in the IBM software vendor league. Short term fiscal plans include using the currency clout of combined stock performances, together with some $60m in cash and liquifiable investments, to make a series of cash-oriented product acquisitions. Returning to his people philosophy, Chatfield stressed that customers inherited via acquisition will not be forced to convert overnight. Instead, combined development teams will build a simple migration strategy, while add-on products to protect customer investment will continue to be made available. Plans are also afoot to merge general development activities, including the planned integration of Duquesne’s performance and optimisation software and Morino’s MICS. The satellite link installed by Duquesne last year to tie its UK operation to Pittsburgh will be extended to encompass Virginia. In addition, Du-quesne will provide Morino with access to its new Sierra 3090 class mainframe. Although both parties attribute their success to filling IBM market niches, Chatfield appears confident that the merger will not produce any serious overlap in product line.
Gleneagles Over 50% of both companies’ past revenues have been generated by products which have no independent software competition, he added. Clearly determined to combine a weekend management summit in Gleneagles with a spot of European consciousness-raising, Chatfield also stressed that Duquesne, old and merged, regards an international presence as an important part of its growth. Last year, 42% of the company’s business was generated by internat ional sales, with some 35% coming exclusively from Europe. Post merger, all international operations will be controlled by Morino’s European chief Mike Cocks from the UK. Although Morino has a larger UK customer base, Duquesne Systems Ltd UK director Malcolm Weston claims over 150 customers, and the installlation of some 500 products. Long-term, Chatfield does not appear to believe that the new merged company will be forced to follow the Cullinet, Cincom and ADR path and diversify. However, Duquesne will offer a future version of its Terminal Productivity Executive package, TPE, for Sun Microsystems’ Unix workstations, and currently has a number of communications products providing IBM-to-DEC or Hewlett-Packard inter-connectivity. The market opportunities for niche products designed for MVS environments are unlimited, he concluded.
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