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Corel to buy XML company for $36 million

The software maker says it has agreed to purchase SoftQuad Software in a move to boost the Internet resources in its desktop-publishing applications.

Corel on Tuesday said that it has agreed to purchase SoftQuad Software in a move to boost the Internet resources in its desktop-publishing applications.

In a stock swap worth approximately $36 million, Corel is buying a company with a solid grounding in XML (Extensible Markup Language), a key technology by which individuals and companies can create and exchange content on the Web. The language works not only with text, but also with audio and video data, and is a component of online transactions.

A key beneficiary of the move will be users of Corel's venerable WordPerfect word-processing software, the Ottawa-based company said in a statement. The SoftQuad purchase will also build on Corel's acquisition last month of graphics-software maker Micrografx.

The desktop-software maker said it will pay $1.50 for every SoftQuad share--that is, 0.4152 of a Corel share for each SoftQuad share, based on the average price of Corel's stock over the 10 days prior to Aug. 6. Corel expects to issue 9.85 million shares, depending on the exercise of options and warrants, for a total acquisition price of $35.58 million.

In Tuesday morning trading on the Nasdaq, Toronto-based SoftQuad was at $1.33, up 21 cents, or about 19 percent, from Monday's close. Corel dropped 14 cents, or about 3 percent, to $3.67.

Following the closing of the deal, which is expected in the fourth quarter of Corel's fiscal 2001, the company is expected to announce further integration plans. The transaction is subject to approval by regulators and SoftQuad's shareholders.