Shares of intranet software maker NetManage (NETM) jumped 10 percent in trading today, after the company said it will buy client-server software maker NetSoft, creating one of the largest vendors in the PC connectivity market.
NetManage shares rose as high as 3-13/16 in morning trading, up from its close of 3-5/16 yesterday.
Under the terms of the $26 million cash deal, NetManage will buy all the outstanding shares of NetSoft, subject to shareholder and regulatory approval. The transaction is expected to close during August.
Privately held NetSoft develops, markets, and supports manageable PC-to-host connectivity software. The company's sales revenues last year exceeded $30 million.
Zvi Alon, president and CEO of NetManage, outlined the benefits of the deal in a morning conference call to analysts and media.
"The combination of NetSoft technology and ours should provide the best [System Network Architecture] solution for our customers," Alon said. "It will create one of the largest vendors in the expanding PC connectivity market...and broaden our management team significantly."
The newly formed company will retain Alon as president and CEO. Current NetSoft president Patrick Linehan will become the senior vice president and general manager of business development.