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IBM buys Informix for $1bn

Group's remains launched as Ascential

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IBM is paying $1 billion for Informix's high-end database management system business, allowing the software company to dedicate itself to creating database applications.

The cash purchase will see IBM integrate Informix's code development, customer service and support, and sales teams into Big Blue's own groups.

Informix itself will effectively cease to be. The company will be reborn as Ascential Software, which will develop solutions based on Informix, sorry, IBM database technology.

The announcement of the deal came hot on the heels of the release of Informix's Q1 results. The company recognised revenues of $217.1 million, down from $226.8 million last quarter and the $250.9 million it reported for the same period last year.

Informix had already decided to split in twain and form two separate businesses. Charges arising from this restructure helped knock the company's earnings from $18.3 million (six cents a share) to $14 million.

Informix's database software operation contributed $183.8 million to the group's Q1 revenues; Ascential contributed just $33.7 million.

That doesn't seem much to start out with, but the company will at least walk away from the IBM deal with $800 million in cash (after tax) and zero debt. It also has a partnership with Big Blue and the support of the latter's sales and marketing team. More to the point, it has gross margins of around 50 per cent, which it expects to boost to between 65 per cent and 70 per cent by the end of the fiscal 2001. 2002 should see that grow to 70-75 per cent.

Ascential's CEO and chairman, Peter Gyenes, said the company was looking to achieve 35-40 per cent revenue growth during the current fiscal year, followed by 40-50 per cent growth in 2002 as the global economy revives. Q2's revenues should show a 15 per cent increase over Q1, the company said.

Ascential will enter "sustained" profitability during Q4, Gyenes added.

For its part, IBM gets shedloads of big-name customers and as world+dog has pointed out some further weaponry in its battle with Oracle. ®

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