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Novell No More

There are still 'Is' to be dotted and 'Ts' to be crossed, but for all intents and purposes, the deal is done for Novell. The company is credited with making the local area network popular. With a large helping hand from Xerox, the benefactors of Adobe, Apple and 3Com, among others - is being bought by Attachmate for approximately $2.2 billion, excluding intellectual property assets being sold to CPTN Holdings LLC, a consortium of technology companies organized by Microsoft, for $450 million in cash.

Attachmate, which is owned by an investment group led by Francisco Partners, Golden Gate Capital and Thoma Bravo, plans to split Novell into two business units -- Novell and SUSE. So far all that is known about Microsoft's share is an SEC 8-K filing  is that it is buying the rights to Novell 882 patents. Also according to the 8-K, Novell and its subsidiaries are sitting on cash and cash equivalents equal to approximately $1.03 billion.

Long the subject of takeover rumors, the action started heating up earlier this year with as many as 20 companies - most of them hedge funds - looking to acquire Novell.

Founded in 1979, the company rose to fame with a PC network operating system called NetWare, based on the Xerox Network Systems protocol, and by the early 1990s accounting for nearly 70 percent of the NOS market. Eventually eclipsed in this space by Microsoft, today Novell has four major units. Novell's 2003 acquisition of SUSE in 2003 strengthened its open source business. Its main open source software products include SUSE Linux Enterprise Server, SUSE Linux Enterprise Desktop, and SUSE Moblin. The company currently provides products and support for proprietary and open source software to over 50,000 enterprises globally.

This appears to be a very good deal for Attachmate, but it is also ironic, says analyst Laura DiDio, principal, Information Technology Intelligence Corp. (ITIC). "It's like finally we've got a perfect circle. What would have happened if Ray Noorda (former Novell CEO) back in the early 1990s had accepted Microsoft's offer ($12-13 billion) to acquire Novell? And here we are 20 years later with them [Microsoft] now getting Novell, or at least a piece of them."

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