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February 24, 1997updated 05 Sep 2016 12:41pm

OPEN MARKET BUYS AGAIN: PAYS $45M FOR FOLIO

By CBR Staff Writer

Open Market Inc has made its second acquisition in as many weeks. The Cambridge, Massachusetts-based internet commerce software company has paid $45m in a cash and shares mix for Reed Elsevier Plc’s Folio Corp, an electronic document management and publishing company based in Provo, Utah. The deal is for $25m in Open Market stock $15m in cash and the other $5m in a cash and stock mix, depending on certain post-closing events. The acquisition will be accounted for as a purchase, resulting in a charge in this, the company’s first quarter. Almost all of it will be accounted as acquired in-process research and development. Folio was expecting a loss of around $4m to $5m this year, on sales of around $16m to $18m. Chief financial officer Regina Sommers told Reuters the company expects some dilution this fiscal, and accretion in 1998. Cowen & Co analyst Jamie Kiggen expects the Open Market loss per share to increase from about $0.40 per share to around $0.75 to $0.80 per share following the acquisition. Kiggen still maintained his buy rating for three year-old Open Market, according to Reuters. All of Folio’s 190 staff will stay on and become the Folio Division of Open Market. Earlier this month Open Market paid $12m for Waypoint Software Corp and its catalog tool (CI No, 3094). Folio’s product set includes Folio 4.0 and Folio siteDirector 3.1. They’re based on the company’s infobase technology, which it says manages multimedia information in way that makes searches easier. Folio Views is an access and retrieval product; Folio Builder is the tool for creating and distributing electronic data, Folio Publisher is self-explanatory and Folio Integrator includes ActiveX and C/C++ APIs. Folio was bought by Lexis-Nexis, which in turn was acquired by Reed-Elsevier. Open Market has three business areas: as a Commerce Service Provider, with its; business to business cataloging, which Waypoint is into, and information publishing, which was something of a nascent area before it snapped up Folio. Open Market’s main product is the OM-Transact e-commerce package. Nanda Krish, Open Market’s VP corporate business development said the proximity of the two acquisitions was purely coincidental – the Folio deal had been talked about for more than a year, he said. Open Market shares closed down $1.25 at $13.50.

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