Software // Enterprise Applications
News
8/22/2005
06:12 PM
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BEA Buys Plumtree Software For $200M

BEA plans to marry its application server and middleware with Plumtree's tools for building portals.

BEA Systems plans to buy Plumtree Software for about $200 million in cash, according to a deal the two middleware vendors agreed to Monday.

BEA sells the WebLogic application server and other middleware used to join different computer systems for multi-step jobs. Plumtree makes software for building portals.

In a conference call with analysts Monday, BEA CEO Alfred Chuang said Web portals influence 65% of BEA's application server sales. Adding Plumtree's portal software to BEA's portfolio will help app server sales grow by allowing BEA to reach a new audience of non-technical business users who buy and use Plumtree software, he said.

BEA primarily targets software developers with its products.

The two companies' products use common technical standards such as J2EE and Web services.

Plumtree, which was founded in 1996, sells to about 700 customers, including Airbus, Ford Motor, Starbucks, and the U.S. Navy. Shares of BEA (Nasdaq--BEAS) gained 9 cents to close at $8.89 on Monday. Plumtree shares (Nasdaq--PLUM) closed up 19 cents at $4.86. The companies announced the deal after the close of trading.

BEA will pay $5.50 per share for Plumtree, and assume its outstanding stock options under the deal, which is scheduled to close by November.

Both companies make middleware used by businesses to integrate the software applications and operating systems needed to perform corporate tasks. BEA plans to create a new business unit to sell Plumtree's products, and expects the deal to be accretive to earnings.

BEA earned $131.1 million on sales of $1.08 billion for the fiscal year ended in January. Plumtree lost $9.6 million on sales of $84.1 million last year.

Most of Plumtree's 400 employees are expected to join BEA. They won't have far to travel; the two companies' offices are located a block apart in San Francisco.

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