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July 11, 1993

STERLING SOFTWARE OUTLINES THE SHAPE OF THE FIRM AFTER ABSORBING SYSTEMS CENTER

By CBR Staff Writer

Sterling Software Inc, the Dallas software products company that transformed itself when it acquired Informatics Inc almost a decade ago, has been outlining the details of its new transformation following completion of the acquisition of Systems Center Inc, Reston, Virginia. Systems Center itself had been built up by acquisition and merger by VM Software Inc, which adopted the new name after acquiring The Systems Center in Irving, Texas – Irving is a suburb of Dallas, where Sterling lives. The share exchange transaction puts a value of about $156m on the company, excluding Systems Center options and warrants assumed in the merger. For fiscal 1992 Sterling saw revenue of $259.3m and Systems Center $131.0m so the combination will be setting half a billion dollars as its next landmark. Sterling reckons that the products and services acquired complement our own product lines, and all of them will be fully supported. Of the combined employee base of 3,200, around 400 have been declared surplus to requirements, mainly because of overlapping job functions in the two companies – and despite being the acquiring company, Sterling accounted for 125 of the redundancies. Sterling has now reshaped two of its major business groups – Systems Software and Electronic Data Interchange – to combine complementary product lines and business services, and to assemble related products under new product family names, it says. And a new International Group has been formed to consolidate the new company’s operations outside the US. The Systems Software Group and its product lines have been expanded into the new Enterprise Software Group, with four divisions and product families specialising in applications management, storage management, enterprise systems management and VM software, and is headquartered at the old Informatics base in Woodland Hills, California. It consists of four divisions – the Applications Management Division in Chatsworth, California, which offers the Answer series of information management products; the Storage Management Division in Sacramento, California, specialising in products to manage and control enterprise-wide data under the name SAMS; the Systems Management Division, in Reston provides network management and systems management applications and markets 12 products under the Solve name – its principal development lab is in Sydney, Australia; and the VM Software Division in Reston offers VM systems management products. Together these four do some $220m a year worldwide.

Expanded

The EDI Group has been expanded into the new Electronic Commerce Group, based in Columbus, Ohio, and doing about $115m a year. It also consists of four divisions – the Interchange Software Division in Columbus, supplying translation products and other enabling software for Electronic Data Interchange, marketed under the product family name Gentran; the Network Services Division in Columbus, providing EDI network services in North America under the Commerce name; the Communications Software Division in Dallas, providing file transfer data communications products under the Connect name; and the Banking Systems Division in Dallas, providing item processing and financial EDI services for major banks, including 98 of the top 100 in the US. The new International Group is headquartered in London, and looks after the Europe Division in London, Pacific Division in Tokyo, Americas Division in Toronto and Distributor Division in London. There are also sundry scientific and intelligence interests.

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