After months of speculation about who might acquire Novell (NASDAQ:NOVL), the company announced today that it was being sold to enterprise software vendor Attachmate for $2.2 billion. The deal is set to close in the first quarter of 2011.
Privately held Attachmate will be paying $6.10 per Novell share, which is a 9 percent premium over Novell’s closing stock price on November 19, 2010. As part of the sale, Novell is also splitting out the sale of ‘certain intellectual property assets’ for $450 million, to a consortium led by Microsoft. It is unclear what those intellectual property assets include at this point. Novell did not respond to a request for comment by press time.
Novell’s intellectual property assets include the lucrative copyrights for Unix System V. Novell defeated SCO in a courtroom battle this year over ownership rights for the Unix System V copyrights and patents.
“After a thorough review of a broad range of alternatives to enhance stockholder value, our Board of Directors concluded that the best available alternative was the combination of a merger with Attachmate Corporation and a sale of certain intellectual property assets to the consortium,” said Ron Hovsepian, president and CEO of Novell in a statement.
Speculation over Novell’s ownership future first began in March when hedge fund Elliott Associates launched a takeover bid for Novell. Novell declined to accept the Elliott offer, which was set at $5.75 per share, though Novell’s board of directors indicated at the time that they would explore other options to realize shareholder value.
Though Elliott Associates’ initial bid did not prevail, as part of the Attachmate transaction Elliott Associates will be an Attachmate shareholder.
“Elliott is pleased to have been a major catalyst in this transaction, enabling Novell’s shareholders to realize substantial shareholder value,” said Jesse A. Cohn, portfolio manager at Elliott Management in a statement. “Novell has a robust product set that we believe will create a significant value opportunity as part of the Attachmate Corporation portfolio of products.”
Under the terms of the deal, Attachmate intends on dividing Novell into separate business units, one for Novell and one for the SUSE Linux business.
Novell acquired SUSE Linux back in 2003 for $210 million. The Linux business at Novell only became profitable this year. The biggest source of revenues for Novell’s SUSE business is a multi-year agreement with Microsoft that includes intellectual property provisions.
“This acquisition will add significant assets to our current portfolio holdings and the Novell and SUSE brands will allow us to deliver even more value to customers,” said Jeff Hawn, chairman and CEO of Attachmate Corporation in a statement. “We have great respect for Novell’s business, its employees and its commitment to customers. Moreover, we look forward to maintaining and further strengthening Novell and SUSE solutions to meet market demands.”