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Sybase to acquire business software maker NEON

E-commerce software giant Sybase announces plans to acquire New Era of Networks in a stock swap valued around $373 million.

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John Chen, CEO, Sybase
E-commerce software giant Sybase announced plans Tuesday to acquire New Era of Networks in a stock swap valued around $373 million.

Emeryville, Calif.-based Sybase expects to complete the acquisition in the second quarter of 2001. Denver, Colo.-based NEON builds and sells software that helps corporate clients integrate data-collection software purchased from different companies.

NEON is one of a growing number of companies in the so-called application-to-application niche. The sector has been mushrooming since the late '90s, as companies struggle to sift through manufacturing, accounting and customer data gathered through enterprise resource planning (ERP) and customer relationship management (CRM) software.

ERP and CRM became hot buzzwords in Corporate America in the mid-'90s, but many users soon realized that the expensive, complicated software was useless if different brands couldn't communicate with each other. Walldorf, Germany-based SAP is one of the most popular sellers of ERP software, while San Mateo, Calif.-based Siebel Systems is a CRM leader.

NEON bills itself as a company that helps bridge "language barriers" between incompatible, often competing, brands of software. Its software allows corporations to integrate different ERP, CRM, supply-chain management and e-commerce applications from companies such as SAP, Siebel, i2 Technologies and BroadVision.

Under the terms of the agreement, each share of NEON common stock will be converted into 0.3878 shares of Sybase common stock, which represents an offer price per share of $9.50, and results in a net purchase price of approximately $373 million. Those figures are based on the $24.50 per share closing price of Sybase common stock on Tuesday.

The acquisition, which must still pass a government review, has been approved by the boards of directors of both companies.

Upon completion of the acquisition, Sybase will fold NEON's product line with Sybase's flagship product, Enterprise Portal, and create a new division, executives said in a statement Tuesday. The division will focus on combining the companies' enterprise portals and Internet applications.

The acquisition gives Sybase a total of 5,500 employees and more than 43,000 customers worldwide. John Chen will remain chairman, president and CEO of Sybase. Rick Adam, now chairman and CEO of NEON, will become president of the Sybase e-business division.