Netscape buys out Actra partner
Netscape Communication is buying out its partner, GE Information Services, in their e-commerce joint venture, Actra, for $56 million in stock.
Netscape hailed the acquisition as another step in its evolution from a browser company into one focusing on enterprise software.
Last quarter, Netscape said, 82 percent of its revenues came from sales of enterprise solutions and services, with 18 percent of revenue coming from standalone client sales.
"This positions us to compete aggressively in the electronic commerce market, where Microsoft is not competing today," said Lori Mirek, Netscape's senior vice president of marketing. She stressed Actra's software as an extension of Netscape's extranets strategy of linking businesses, although two Actra products are targeted primarily at the consumer commerce space.
Formed in April 1996, Actra was heralded at the time for linking Netscape's Internet savvy with GE Information Services' marketing muscle and expertise in electronic data interchange (EDI), a forms-based method for communicating and conducting transactions directly from computer to computer without human intervention.
GE Information Services, which operates a secure private network for handling electronic commerce, will continue to resell Actra's line of business-to-business applications for doing commerce over the Internet.
Since Actra was formed, GEIS has begun to emphasize work in specialized industry or vertical markets.
"Last April, GE and Netscape decided to invent a new generation of e-commerce products," said Venkat Mohan, vice president of global marketing for GEIS. "Actra has accomplished what it was designed to do." GEIS got "a pretty excellent financial return" on its undisclosed investment, Mohan added.
In terms of selling Actra software, Netscape's buyout will mean little--Actra never had a dedicated sales force and always intended to go through Netscape and GEIS channels. On the development side, most of the work on Actra's five products was complete, although some won't ship until early next year.
Actra has created three applications in its CommerceXpert line of enterprise products, and has taken over two existing Netscape applications, Merchant System and Publishing System. The Actra applications are designed to automate purchases between manufacturers and suppliers by linking into the existing software infrastructure for ordering, billing, shipping, and inventory control.
Under the deal, Netscape will absorb Actra and its employees when the sale is completed. Actra employees were meeting away from the office this afternoon, apparently to be briefed on the sale, and could not be reached for comment.
The transaction involves Netscape issuing 1.7 million shares of common stock to GEIS. At today's closing price of 33, up 1/16 from yesterday's close, the deal is valued at $56.1 million. The stock of General Electric, parent company of GEIS, traded at 68-3/4 today, off 3/8.
Netscape plans to issue up to 600,000 Netscape shares and options to some of Actra's 200 employees, who will be absorbed by Netscape. Former Actra products now will carry the Netscape brand. However, the transaction, designed to close by year's end, is still subject to government approval.