Atlas, like Harbinger, is a provider of single-source electronic commerce and EDI, while Premenos is a provider of midrange EDI software and Internet-based e-commerce solutions. EDI is a forms-based way of sending communications or documents over networks, communicating directly from one computer to another without human intervention. Many major manufacturers have set up EDI systems as a way to order from suppliers.
The deal will move Harbinger into the No. 2 spot among EDI vendors, Harbinger officials say.
The deal with Premenos makes Harbinger the leader among EDI Internet service providers. Atlas brings strong product in the area of fax and email messaging platforms, as well as cross-media platforms, which will allow Harbinger to offer a range of formats to connect large companies with small companies, said Torrey Byles, principal consultant at Granada Research in Half Moon Bay, California.
Harbinger will pay $11.8 million to Atlas via the issuance of about 313,000 new shares of Harbinger stock, and will pay Premenos roughly $200 million by exchanging .45 shares of Harbinger for every share of Premenos.
Harbinger expects to take a fourth-quarter charge of between $20 million and $30 million for the Premenos acquisition. That deal is expected to close December 31. Meanwhile, the Atlas deal is expected to result in a fourth-quarter charge of between $3 million and $5 million.
The Premenos deal may be a way for Harbinger to bulk up in order to compete better with its rivals. GE Information Systems, for example, has a joint venture with Netscape to create e-commerce software for the Internet that handles EDI transactions.
Harbinger, in which Microsoft cofounder Paul Allen holds a significant stake, both markets EDI software and operates a value-added network (VAN), a secure private network over which EDI transactions are handled. Harbinger also handles electronic clearinghouse (ECH) transactions for financial institutions. ECH is a method of moving money online over secure financial networks.
(Paul Allen is an investor in CNET: The Computer Network)