Software AG Buys Parts Of Jacada For $26 Million

Software AG is acquiring the legacy application modernization product line of Jacada for $26 million, leaving Jacada free to pursue its second product line, its call center solutions business, under its own name.

The buyout, announced Thursday, is unusual in that Software AG has been benefiting from its acquisition track record with a turnaround in revenue and profits. The Jacada product set is its third acquisition this year, after WebMethods for $546 million in June and 80% of SPL Israel in March for $62 million.

In this case, Software AG is buying selectively and taking only eight staff members of Jacada on board to continue development of the product set, which includes Jacada Terminal Emulator, Jacada Studio, Jacada Innovator, Jacada Interface Server, and Jacada Integrator. The products are used to modernize interfaces on mainframe and other legacy applications or reconstitute them for Web services and service-oriented architectures. The set generates about $12 million a year in revenue, a Software AG spokesman said.

In addition, Software AG is acquiring information on the 200 customers, most in the United States, who use the products. "These customers will enjoy access to a host of complementary products," Software AG CEO Karl-Heinz Streibich said.

Jacada president Paul O'Callaghan said the deal "marks a major milestone in the transformation of Jacada." It will be completed Jan. 1, which will allow Jacada to keep "a singular focus on our call center solutions business," he said.

During the past three years, Jacada's call center software business has grown at an annual growth rate of 61% and represents 95% of its $12.9 million order backlog as of Sept. 30.

Software AG is the supplier of the Adabase database and Natural fourth-generation language and has a broad integration suite of products to tie new applications to back-end applications and systems.

At the time of its acquisition, WebMethods, in addition to its Web application integration software, had become the owner the year before of Infravio, a startup that designed a leading registry and repository for Web services.

Software AG claims to be the fifth-largest software company in Europe. The Darmstadt, Germany, company is ranked behind SAP, Sage, Dassault Systems, and Business Objects. It expects to surpass $1 billion in revenue in 2008.