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Sun tries to SeeBeyond hardware with $387m buy

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Sun Microsystems finally made the big software acquisition everyone was looking for when it purchased SeeBeyond for $387m in cash this morning.

The move means Sun has finally grabbed an established enterprise software maker. SeeBeyond specializes in the elusive enterprise application integration (EAI) market - a category full of software that helps link other business software packages together to present a more cohesive picture of information to customers. Sun will cough up $4.25 per share to SeeBeyond shareholders should the acquisition close as expected in the "early Fall."

"Sun is well positioned to partner with systems integrators worldwide in serving the global market," said Sun CEO Scott McNealy. "Both they and our mutual customers are increasingly focused not only on the world of web services, but the secure integration of those business processes through service oriented architectures (SOA). This acquisition strengthens our software portfolio and opens new growth and partnering opportunities worldwide."

Sun earlier this month shelled out $4bn for StorageTek - a veteran hardware player. That deal surprised some pundits who expected the majority of Sun's then $7bn cash stockpile to go toward higher growth software companies. Producing software revenue has long been a trouble spot for Sun, despite its branding success with Java and Solaris.

"It's starting to become a habit here," McNealy said, during a conference call, referring to the pace of Sun's large acquisitions.

SeeBeyond lays claim to more than 2,000 customers worldwide and has been going at the software market for 15 years.

"The products, services and solutions currently offered by Sun and SeeBeyond are complementary with little overlap," Sun said. "SeeBeyond's Integrated Composite Application Network (ICAN) Suite is a highly-integrated suite, bringing back-office integration, B2B integration, ETL Master Data Management, Business Process Management, Workflow, Business Activity Monitoring, Application Adapters, and a suite of graphical development tools for composite application creation based on web services."

These products join software such as Sun's application server, web server, identity server and portal product. The SeeBeyond code will become the sixth part of Sun's Java Enterprise System and be branded as the Java System Integration Suite.

SeeBeyond reported revenue of $37m in its first quarter ending 31 March. SeeBeyond shares closed at $3.28 per share on Monday, making Sun's offer a 30 per cent premium on that close. ®

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