Pervasive Software Inc. is buying Data Junction Corp. in a deal worth $51.7 million, company officials announced on Monday.
Pervasive, an Austin, Texas, maker of embedded database technology and other data-management solutions, will purchase Data Junction for $22.1 million in cash and 5 million shares of Pervasive common stock. The total transaction value is based on Pervasives closing price per share of $5.91 on Friday.
The transaction was unanimously approved by the boards of directors of both companies and is now subject to the approval of both companies shareholders. The deal is expected to close in the fourth quarter of this year.
Data Junction, also of Austin, is a privately held company traditionally associated with ETL (extraction, transformation and loading) software. It has also recently been delving into EAI (enterprise application integration) technology: In February, it announced Integration Architect, an integration broker designed to tie together systems and applications.
Pervasive has also been branching out: In April it acquired data security and auditing technology from ThinkNet Inc.
Pervasive CEO David Sikora told eWEEK that the motivation behind the acquisition was threefold. First, the database and application integration marketplace is a “very attractive market that we think has a lot of significant upside and opportunities,” he said.
Second, Pervasives core customer base of thousands of business-application developers all have some sort of integration problem. “Each database, every product we ship and every application on top of it is empty, with no data in it,” he said. “Those applications have to co-exist inside a broader IT architecture and work with other applications. Theres a synergy with our and Data Junctions product lines.”
Third, he said, the two companies are compatible in terms of company culture and profitability. Data Junction has been profitable since 1990, and Pervasive has been profitable for the past 10 quarters. Data Junction took in $14 million in revenues during the last fiscal year, with $2.7 in million in income. Pervasive took in over $39 million in revenues and $6.7 in income during the same timeframe.
Goals for the New
Pervasive officials said in a statement that the company will merge Data Junctions data integration and transformation technologies and products into Pervasives own product line, in a quest to make Pervasive a pure-play data-management infrastructure software company.
“The ability to interconnect data across an enterprise, independent of the application, is one of the most pressing problems currently faced by application developers and end users,” said Sikora in a statement. “Not only does Data Junctions technology represent a significant standalone growth opportunity, but their integration value proposition will also be well-received by Pervasives customer base of thousands of application developers worldwide.”
Data Junction has some 25,000 customers, according to Pervasive executives, including consulting firms and software vendors that embed its technology into their applications. Customers include EDS; Cardiff Software Inc.; and end users such as Automatic Data Processing Inc., J.P. Morgan Chase & Co.,
Data Junction has about 130 employees, and Pervasive has about 160. The acquisition is aimed at growth, Sikora said, and hence no significant layoffs are planned. Data Junction will move into Pervasives Austin offices but will remain a separate division and will retain its current management team.
Likewise, the companies separate database and data-integration product lines will continue in their own rights.
“We will continue to develop those products and address the market needs theyre addressing,” Sikora said. “Well look for opportunities where we can bring the strengths of both to bear in certain market segments.”