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Asymetrix will buy fellow toolmaker

The tools developer will merge with competitor Aimtech this summer through a stock transaction in an effort to better take on Macromedia.

Tools developer Asymetrix today announced plans to buy competitor Aimtech in a stock transaction, creating the world's largest developer of online learning tools and services.

The acquisition, as previously reported by CNET's NEWS.COM, is expected to close in late July or early August.

The arrangement will bolster Asymetrix's market in the high-end multimedia authoring tools market for online learning.

"This acquisition will create the indisputable leader for online learning solutions," said Jim Billmaier, Asymetrix president and chief executive, in a statement.

Aimtech competes against Macromedia (MACR) in high-end multimedia authoring tools. Asymetrix, meanwhile, competes with Macromedia in the low-end authoring tools market, Aimtech CEO Andrew Huffman said in an earlier interview.

Asymetrix was started by Microsoft cofounder Paul Allen, who serves as the company's chief technical advisor. (Allen is also an investor in CNET: The Computer Network)

Online learning tools are a secondary market for Macromedia, Huffman said. (Macromedia chairman Bud Colligan is a CNET board member).

"I've been quite interested in trying to accelerate the consolidation in the industry. Our tools and Asymetrix's tools are sold to a lot of people and, so, the No. 2 and No. 3 competitors are joining to be No. 1," Huffman said in the previous interview.

He added that learning to author, execute, and manage learning applications over the Internet or intranets is a growing business for both merger partners that makes up a sizable portion of their revenues.

Aimtech began merger discussions eight to nine months ago and signed a letter of intent on Tuesday. The deal still awaits shareholder and regulatory approval.

Aimtech, which currently receives 70 percent of its revenues from computer-based training solutions, will generate revenues in the tens of millions after the merger, said Huffman, who declined to elaborate. He said his company has been profitable in the past but has taken a loss during the last year as it has invested heavily in new product development for the Internet.

He expects the combined companies to be profitable.

Billmaier will retain his Asymetrix post following the merger, while Huffman will serve as a consultant until the transition has been completed.

One of the first items on the merger agenda is to integrate products, Huffman said. He noted Aimtech's Icon authoring tool will be integrated into Asymetrix's ToolBook II Librarian, which is designed to manage the delivery of training and educational courseware online. Other new products are expected to soon follow, he added.