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Vignette hooks Diffusion for $32.9 million

Vignette will purchase 100 percent of Diffusion outstanding stock and assume all stock options in exchange for approximately 400,000 shares of Vignette common stock.

Internet software maker Vignette today said it will acquire Diffusion in a stock swap worth about $32.9 million.

Under the agreement, Vignette said that it will purchase 100 percent of Diffusion outstanding stock and assume all stock options in exchange for approximately 400,000 shares of Vignette common stock. At yesterday's close, Vignette shares were up 6.75 points to 82.25. Vignette said it expects to close the deal by June 30, 1999.

Vignette, which makes StoryServer Web publishing software and personalization tools for e-commerce, said the Diffusion acquisition would add on to the capabilities of its StoryServer technology.

Diffusion, which started out as a maker of push software, last fall retooled its business plan to focus on information delivery for business-to-business applications.

Vignette said in a statement that Diffusion would help Vignette deliver "closed-loop" communications where companies are able to exchange information with their customers through any device, such as the Web, email, fax, telephone, or pager.

"Through the integration of Vignette StoryServer and the Diffusion information delivery server, we are enhancing our customers' ability to interact in real-time with their online customers, " Vignette CEO Greg Peters said in a statement.

Vignette claims that more than 225 companies that produce their sites use their software and services, including CNET, the publisher of News.com, Ziff-Davis, and Qualcomm.

Employees of California-based Diffusion will most likely join Vignette at its San Mateo, California offices, but more specific Diffusion management or executive transitions and changes have yet to be determined, according to a Vignette spokeswoman.

Vignette, which went public in February, said it expects to incur one-time acquisition costs and related charges associated with the transaction, including costs for product integration, cross training, and other merger-related costs.

(CNET: The Computer Network is an investor in Vignette.)