BEA will pay $200 million in cash for portal software maker Plumtree, it has announced.
The deal removes from the market a struggling company that analysts long expected to be bought by a larger vendor, and adds to BEA's portfolio a new line of collaboration software.
BEA will pay $5.50 in cash per share for Plumtree - an 18 percent premium. BEA already has its own portal software, WebLogic Portal. Asked about the product overlap, BEA execs said they see their software and Plumtree Portal serving two different audiences, such as developers and business users, respectively. BEA plans to continue developing and selling both sets of software.
"We'll have two separate portal product lines for as long as we can see," BEA's chief technology officer Mark Carges said.
Plumtree has a staff of around 400, most of whom BEA plans to retain, according to BEA head Alfred Chuang. Plumtree's San Francisco headquarters is just one block away from BEA's San Francisco office.
Plumtree claims 21 million users worldwide from 700 organisations. IDC ranked BEA second and Plumtree fifth in its 2004 ranking of portal vendors by revenue. By IDC's calculation, BEA held a 13.8 percent share of the market, to leader IBM's 24.8 percent. Plumtree held 7 percent, nearly tied with Oracle and behind SAP.
Buffeted by the challenging enterprise software market, Plumtree has struggled for growth and profitability. It posted a loss in four of its last five fiscal years. With portals increasingly viewed as components of a broader applications suite rather than as standalone purchases, Plumtree has been seen for years as a likely acquisition candidate.
Meanwhile, BEA is under pressure to buy or be bought. The company, best known for its application server and other infrastructure software, competes frequently against deeper-pocketed giants such as Oracle and IBM. Before Oracle bought PeopleSoft, BEA was one of the companies on its shopping list of potential acquisition targets.
Mindful of the pressures on BEA to find a buyer or fashion a more distinct presence for itself, Chuang took care to position the Plumtree buy as a sign of BEA's vitality. "This further enhances BEA's scale in the enterprise," he said. "If you take any single point away from this conference call, I would like it to be: BEA is on the move."
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