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April 5, 1992

LEGENT TO ACQUIRE GOAL SYSTEMS FOR $400m IN SHARES…

By CBR Staff Writer

In the mainframe and mid-range software business it is a race to reach critical mass by acquisition before you get eaten yourself and Legent Corp, Reston, Virginia and Goal Systems International Inc, Columbus, Ohio have both been extremely acquisitive over the past five years, but have now decided to get together, with Goal to be the one that gets eaten – Legent says its aim is to get to a size where it can compete head-to-head with Computer Associates International Inc. The two have definitive agreement for Legent to acquire Goal for about $400m in new shares by paying 0.52356 shares for each of Goal’s 19.1m shares out, $21.34 per Goal share: the Goal share price jumped $3.50 to $18.75 on the news. The partners hope to consummate the nuptials by July 31 once all the shareholder and regulatory approvals have been gained. To ensure a lock-out of any third party trying to muscle in, the two have entered into a mutual share exchange agreement should a third party buy more than 10% of either company’s shares. If exercised, the agreement would result in Legent holding about 10% of Goal, and Goal about 3% of Legent. Legent has support of holders of 30% of Goal’s equity. The combination will create a firm with annual turnover running at some $330m, which matches combined shareholders’ equity; combined cash and investments total $197.5m and they have no long-term debt. It will employ over 2,000 people in some 65 offices and 12 product development centres and will serve about 10,000 customers with nearly 65,000 products in use. Goal has two divisions – the Data Center Management Division selling system software for managing, automating, monitoring and analysing use, cost and performance of IBM mainframes. Its Information Technology Division product line consists of performance support systems including computer-based training and reference systems, and professional services.

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