Acquisitive Sterling Software Inc has now swallowed Mystech Associates Inc, a federal services IT contractor, in a stock swap valued at $25m. Dallas based Sterling, which is mostly known for providing applications management and systems management software, is making the purchase to bolster its third-leg Federal Systems business, which now accounts for roughly 25% of its total revenue – $489m in 1997. Mystech boasts numerous multi-year contracts with the federal government to provide software engineering, systems development and support and training. Headquartered in Falls Church, Virginia, it has roughly 300 employees and reported 1997 revenues of $31.1m. Under terms of the deal, Sterling will issue 5.49313 shares of its common stock for each outstanding share and option of Mystech stock Sterling says it will register a total of 942,813 for issuance in connection with the acquisition, which will be accounted for as a pooling-of-interests. The deal awaits the approval of Mystech’s stockholders but has been given the go-ahead by the company’s board. In addition, four of Mystech’s principal stockholders, representing approximately 30.3% of Mystech’s outstanding shares of common stock, have agreed to vote in favor of the acquisition. The deal is expected to close in July.
