Software AG Completes WebMethods Acquisition

Software AG on Friday said it has completed the $546 million acquisition of WebMethods, forming a combined company that takes the German business integration software maker a big step closer to its goal of 1 billion euros, or $1.3 billion, in revenue by 2011.

As a result of the merger, Software AG, which now has more than 4,000 enterprise customers worldwide, revised its financial guidance upward for this year to revenue growth from 30% to 35%, and an increase in earnings per share for the year of 0.50 euros to 0.65 euros. License revenues were forecast to increase by 45% to 50%.

For customers, the benefits included "a significantly strengthened product portfolio, expanded global services and support, and unquestionable financial strength,” Karl-Heinz Streibich, chief executive for Software AG, said in a statement.

Both companies develop software that link related business processes, such as invoicing and shipping, to create an automated internal workflow that's less expensive than manual operations. Software AG, however, focuses mostly on service-oriented architecture technology, and WebMethods concentrates on business process management software. The latter is used by businesses to integrate various back-office functions, and to extend internal networks to customers and partners.

Nevertheless, analysts have said there is considerable overlap in product lines, particularly in the area of creating registries and repositories for software components within a SOA. Software AG has said it doesn't have any plans to eliminate products.