Novell finally dumps WordPerfect

Putting an end to months of speculation, Novell officials said today that Corel is buying the company's business applications group. The star of that group is WordPerfect, the word-processing software that Novell bought from WordPerfect Corporation about two years ago.

Under terms of the deal, Corel will pay Novell about $11 million in cash along with approximately 10 million shares of common stock. Corel will also pay the Provo, Utah, networking giant about $70 million in royalty payments over the next two years to license GroupWise, Envoy, and other technologies.

"It was absolutely a dump-and-run strategy on Novell's part. Now WordPerfect moves into the bargain basement about one step up from shareware," commented Rob Enderle, analyst with Giga Information Group in San Jose, California.

In return, Novell will place one member of Corel's board. The deal puts about one fifth of the Canadian company's stock in Novell's hands.

Last year, Novell officials said they would refocus the company on networking technology and divest it of other technologies. The company paid nearly $1 billion to acquire WordPerfect, along with Borland International's Quattro Pro software.