Serena Software To Acquire Merant

Serena Software Inc. has announced its intention to acquire Merant Inc. for $380 million in a stock offer that pays a 25% premium over the U.K.-based company's share price.

The move would combine the customer bases of two software change-management vendors and place Serena among the three largest change-management vendors. The combined company would have an estimated $225 million in annual revenue and 15,000 customers, including 46 of the 50 largest multinational companies, company spokesmen said in announcing the offer.

Change management is the systematic controls placed over modifications, updates, and other changes to software, whether under development or in a production system. With change management, IT managers can track bugs and, if an upgrade proves balky or ineffective, re-implement a version of a system that worked. Change-management software generates an audit trail of changes.

Serena's change-management system, System Software Manager 8.2, is designed primarily for mainframe operations. Merant sells its Professional 8 system, formerly PVCS system, for distributed platforms, Merant officials said.

In announcing the acquisition, Serena spokesmen presented a rationale that said the boards of directors of both companies believe the deal "should deliver significant strategic benefits." The products from the two companies will run "on all major operating systems," from mainframes to Unix, Linux, and Windows NT, they noted.

Gerald Perkel, president and CEO of Merant, will join the board of Serena as a director.

A Merant competitor, MKS Inc., warns against the merger. "Our industry has undergone tremendous upheaval as a result of merger and acquisition activity over the last two years-- further consolidation is just plain bad for the customer," said Michael Harris, MKS chief operating officer. Further consolidation will reduce choice and stifle competitive innovation, he said.