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October 1, 1998

NEON EXTENDS INTEGRATION LEAD WITH CENTURY BUY

By CBR Staff Writer

Application integration company New Era of Networks Inc (Neon) has bought its way into new vertical markets and landed synchronous, single sign-on and other technologies it would otherwise have had to build with the acquisition of 23-year old Century Analysis Inc. Neon, of Englewood, Colorado, is paying $41m, half in cash and half in stock for privately-held Century, which did $17.6m in 1997, with a further $8m in stock to be paid depending on performance targets being met. Neon, which says the purchase will be immediately accretive, has a cash pile of some $50m remaining. Neon says most of the product lines are complementary. It gets Century’s Impact synchronous message broker, single sign-on, task management, web-based ecommerce integration solution and other connectivity software technologies, some of which it had previously planned to develop itself. Century was about to start work on its own rules engine, formatting and asynchronous capabilities which Neon already has. It claims there’s an awful lot of cross-selling to be done. Neon, most of whose clients remain financial services concerns, picks up healthcare industry specialist Century’s 500 customers. Neon will integrate Century’s technology into its MQIntegrator product, which is sold by IBM Corp, and other applications. Neon did $7m in 1996, $23m in 1997 and was predicted to achieve revenue of $50m before the acquisition. Neon claims to be the largest application integration company. Analysts believe application integration ISVs should begin to win production class budgets from clients rather than prototype money next year. The market is already growing at more than 100% a year. Prices start at $250,000-up and no one company owns more than 10% of the market. Neon claims it can deliver application-to-application solutions it would take two to four years to code and implement using SAP, in say a general ledger application.

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