Buying software

Utah-based Novell has entered into a definitive agreement to acquire software vendor SilverStream Software.

Under the terms of the agreement, Novell will commence a cash tender offer to acquire all of the outstanding shares of SilverStream common stock at a price of $9.00 per share. This will be followed by a merger in which the holders of the remaining outstanding shares of SilverStream common stock will receive the same cash price.

Assuming a closing of the acquisition in July 2002, with approximately 23.6 million shares projected to be outstanding, which includes estimated option exercises prior to the closing date, the total cash acquisition price before acquisition fees will be approximately $212 million. In that event, cash on SilverStream’s balance sheet is expected to total approximately $100 million, which would yield a net cash outlay by Novell of approximately $112 million.

The acquisition has been approved unanimously by the boards of directors of each company and is subject to customary conditions, including regulatory and other standard approvals. David Litwack, president and chief executive officer of SilverStream, and certain other SilverStream shareholders have agreed to tender their shares, representing approximately 20.33% of the outstanding common stock. The tender offer requires that at least a majority of the fully diluted shares be tendered.

With acceptance of the tender offer by shareholders representing 90% of SilverStream shares, the acquisition would likely close in July 2002. If less than 90% of the shares are tendered, a formal stockholder meeting of SilverStream stockholders would need to be called to approve the transaction, and the acquisition would likely close during Novell’s fourth quarter 2002.

SilverStream will become a wholly owned subsidiary of Novell.