As anticipated here yesterday (CI No 3,390), Phoenix Technologies Ltd is to acquire its smaller rival, Award Software International Inc, creating a systems software house that owns as much as 70% of the desktop BIOS market. Only one other company, struggling Systemsoft Corp of Natick, Massachusetts, has a significant presence in the market. The combined company, which will operate under the Phoenix name, would have seen combined 1997 revenues of over $100m, around 800 employees, and a market capitalization of around $300m. The two say the benefits of the merger should be faster time to market, accelerated product development and economies of scale for manufacturers of PCs, peripherals, information appliances and embedded systems. BIOS companies have been facing increased investment pressure recently as Intel Corp has developed new chips and chip packaging in the run up to the launch of the 64-bit Merced processor. There have also been new demands to develop software for sub $1,000 PCs, and new peripheral and consumer device interconnect standards such as IEEE-1394 FireWire and IrDA, and new operating systems such as Windows CE and NT 4.0 and 5.0. Award has a stronger product catalog for low-end PCs, while Phoenix has concentrated on the high-end. Award relies more on sales from Asia, and the combination will help protect it against weakness in the Asian markets. Shareholders of Award will receive 1.225 shares of Phoenix common stock for each share of Award common stock in a deal valued at around $120m. Jack Kay will continue as president and CEO of Phoenix, while George Huang, chairman and CEO of Award will report to him as president of the Award software subsidiary.
รก
