Fallen giant Novell to be acquired by Attachmate for $2.2bn

Software supplier Novell, once one of the most influential companies in corporate IT, is to be acquired for $2.2bn by Attachmate

Software supplier Novell, once one of the most influential companies in corporate IT, is to be acquired for $2.2bn by Attachmate, a software firm owned by a group of investment companies.

Novell has attempted for some time to shift its business away from the area where it made its name - the Netware network operating system and associated tools - and establish itself as an open source provider, notably through the acquisition of SUSE Linux in 2004.

But the firm has struggled to make a profit and has been known to be up for sale. In its most recent full financial year, Novell delivered revenue of $862m, but made a loss of $213m. Attachmate has annual revenue of about $400m, according to a report by analyst IDC.

Attachmate was best known for its terminal emulator products, but expanded into security and systems management with the purchase of NetIQ for $495m in 2006.

"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.

"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."

Ron Hovsepian, president and CEO of Novell, said, "Novell, SUSE, Attachmate and NetIQ have complementary product portfolios and many shared customers. We are pleased that Attachmate has committed to building on the strengths of the Novell and SUSE brands to address customer needs."

Hovsepian acknowledged in a recent interview with Computer Weekly that Novell's transition away from NetWare to open source had not always been well received by customers.

"We have to be consistent and build the brand, but due to our past our customers and business partners are confused," he said.

The acquisition is expected to close early in 2011, and is subject to the usual regulatory approvals.

Attachmate is owned by an investment group led by Francisco Partners, Golden Gate Capital and Thoma Bravo.

Read more on Operating systems software