Attachmate Buys Novell for $2.2B—the End of an Era

Novell, the Waltham, MA-based networking and workload management software firm (NASDAQ: [[ticker:NOVL]]), said today it has agreed to be acquired by Seattle-based Attachmate for $2.2 billion in cash. The deal represents a purchase price of $6.10 per share, a 9 percent increase over Novell’s closing stock price on Nov. 19.

Novell also said it is selling off “certain intellectual property assets” to CPTN Holdings, a consortium of tech companies organized by Microsoft (NASDAQ: [[ticker:MSFT]]), for $450 million in cash. All in all, this sounds like a pretty sad end for a company that once rivaled Microsoft. (Back in 2008, my colleague Wade reported on Microsoft’s and Novell’s unlikely Windows-Linux partnership.)

Attachmate is owned by a private investor group led by Francisco Partners, Golden Gate Capital, and Thoma Bravo. The company, which helps businesses manage and deliver IT services, is a Seattle-area software icon.

This is the second $2 billion-plus tech acquisition to span the Boston and Seattle areas in as many weeks. Last week, Hopkinton, MA-based data storage company EMC (NYSE: [[ticker:EMC]]) said it is acquiring Seattle-based Isilon Systems (NASDAQ: [[ticker:ISLN]]) for $2.25 billion.

Today’s announcement ends many months of speculation about the future of Novell. Back in March, Novell rejected a $2 billion buyout bid from hedge fund Elliott Associates, saying the proposed $5.75-per-share offer was too low. As part of the current transaction, which is expected to close in the first quarter of 2011, Elliott Management (which includes Elliott Associates) will become an equity shareholder in Attachmate.

Author: Gregory T. Huang

Greg is a veteran journalist who has covered a wide range of science, technology, and business. As former editor in chief, he overaw daily news, features, and events across Xconomy's national network. Before joining Xconomy, he was a features editor at New Scientist magazine, where he edited and wrote articles on physics, technology, and neuroscience. Previously he was senior writer at Technology Review, where he reported on emerging technologies, R&D, and advances in computing, robotics, and applied physics. His writing has also appeared in Wired, Nature, and The Atlantic Monthly’s website. He was named a New York Times professional fellow in 2003. Greg is the co-author of Guanxi (Simon & Schuster, 2006), about Microsoft in China and the global competition for talent and technology. Before becoming a journalist, he did research at MIT’s Artificial Intelligence Lab. He has published 20 papers in scientific journals and conferences and spoken on innovation at Adobe, Amazon, eBay, Google, HP, Microsoft, Yahoo, and other organizations. He has a Master’s and Ph.D. in electrical engineering and computer science from MIT, and a B.S. in electrical engineering from the University of Illinois, Urbana-Champaign.