Crystal (NASDAQ: CRYS) of the Formula group signed an agreement for acquiring a controlling interest in Mainsoft. In the first stage, Crystal will transfer $10 million in cash to Mainsoft, in exchange for controlling shares. Crystal also received an option to purchase the rest of the shares according to a company value of $22.5 million.
Mainsoft, based in California, develops and markets Windows platforms that enable Windows applications to run in native mode on UNIX and LINUX systems. The company has an agreement with Microsoft that provides it with access to the original code of Windows NT and Windows 2000.
The company's leading product, MainWin, enables software manufacturers and organizations to move applications written in Windows NT to a UNIX or LINUX environment, thus saving time and development costs. Mainsoft's customers include Fortune 500 companies and some of the world's leading software manufacturers, such as Microsoft, Cadence, Rational, and Bridge Technologies.
Acquisition of Mainsoft will enable Crystal to expand its customer base to a variety of platforms and operating systems, such as MVS, VSE, VMS, Unix, LINUX, and Windows NT.
Crystal chairman Gad Goldstein announced that the company "decided to incur additional expenses in order to achieve its new positioning as a leading technology provider. This strategy is currently implemented at both Crystal and Mainsoft, who in the near future plan to incur the required costs to exploit the benefits from the promising opportunities in the market. These costs include Mainsoft's current restructuring expenses, as well as Crystal's management attention and related resources. This acquisition may dilute our earnings in the next few quarters; however, in the long run, we will all benefit from the wide technological span opened up due to this transaction".
Crystal was founded in 1987. The company develops tools for converting software, based on technology it developed. The company's conversion solutions fit centralized computer systems, as well as server-client computer networks.
In response to the announcement, Crystal's share rose today, continuing the sharp rises of recent days, which brought the share to almost $20 and the company market value to $191.4 million. Crystal has doubled its value since mid-November.
Published by Israel's Business Arena on December 15, 1999