For a long time NetManage Inc. (Nasdaq: NETM), a US-based company with Israeli roots, has been up for sale. It has received several bids in recent years, some of them officially reported, but although some of the bidders offered premiums on the company's market price, they were all rejected. Today, however, the company said 'yes" to private company Rocket Software, in exchange for $69 million cash. NetManage is the second technology company with an Israeli connection to be sold this week, after Nur Macroprinters Ltd. (OTCBB:NURM) announced that it being acquired by HP for $117.5 million.
NetManage, based in California, is a 27-year-old company founded by Zvi Alon. It develops and markets software and services that give customers access to business applications, processes, and data. Alon's father-in-law is Uzia Galil, father of his ex-wife Ruth Alon. Galil still sits on the company's board.
Alon went to California in the 1970s, and worked at Intel and other companies before setting up NetManage. Later, partly as a result of acquisitions, he set up the company's Israeli activity in Haifa. NetManage currently employs 215 people in the US, Israel, and Canada.
NetManage's market cap is some $35 million, so that the acquisition deal represents a 95% premium ($7.2 per share, compared with a closing price yesterday of $3.7). The acquisition is expected to close in February 2008, subject to due diligence, and the boards of both companies have ratified the agreement. NetManage's share price has fallen 35% since the beginning of the year.
Alon said today, “We feel confident this is the right strategy for our shareholders, customers and employees and that Rocket will continue to build on our legacy. NetManage’s specialized solutions for integrating, Web enabling, and accessing enterprise information systems will strengthen and advance Rocket’s set of offerings.”
The acquisition announcement said that the proposed transaction was subject to Rocket’s ability to obtain a satisfactory commitment from its primary lender to finance part of the purchase price. Rocket did not name the lender or disclose the names of its shareholders, as in the case of previous acquisitions by the company.
NetManage's first commercial product, launched in the 1990s, was developed on the assumption that Microsoft's Windows would become dominant. The company developed technology similar to Outlook that managed information and messaging. The flagship product was known as "Zikit" (Hebrew for chameleon); hence the company's chameleon logo.
Since the deal was announced, NetManage's stock price has shot up some 80%.
Published by Globes [online], Israel business news - www.globes.co.il - on December 12, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007