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DOW JONES BUSINESS NEWS
Business Objects Announces Pact To Buy Crystal Decisions
Dow Jones Business News - July 18, 2003 -- by Mark Boslet, Dow Jones Newswires;
SAN JOSE -(Dow Jones)- Business Objects SA signed a definitive agreement to buy privately held Crystal Decisions Inc. in a cash and stock deal valued at about $820 million, based on the shares' closing price Thursday.
Business Objects also put its second-quarter earnings in line with Wall Street's views.
In a press release Friday, Business Objects said it will give Crystal Decisions shareholders a total of $300 million cash and 26.5 million shares, which will represent 29% of the combined company.
The shares had a value of $520.1 million, based on Business Objects' closing price Thursday of $19.63.
Based on Business Objects' closing price of $20.26 Friday, the shares currently have a value of $536.9 million.
Business Objects, a French maker of products that monitor business performance, said the deal will add to its earnings in 2004 before certain purchase accounting adjustments. The deal is expected to result in pretax savings of about $25 million in 2004 due to cost improvements.
Crystal Decisions, based in Palo Alto, Calif., makes enterprise reporting software. The company had revenue of $287.5 million in the fiscal year ended June 27.
Business Objects said it expects to report second-quarter earnings of 17 cents to 18 cents a share. Analysts have a mean estimate for earnings of 17 cents a share, according to Thomson First Call (News - Websites).
Business Objects put second-quarter revenue at $127 million to $129 million, above Wall Street's current consensus projection of $122.1 million.
The company will report its second-quarter results July 31. In the year- earlier second quarter, Business Objects earned 17 cents a share, on revenue of $111.2 million.
According to Island ECN (News - Websites), Business Objects' shares recently traded at $20 in the after-hours session, down from their Nasdaq market close of $20.26.
-Kara Wetzel; Dow Jones Newswires; 201-938-5400
Business Objects' Chief Executive Bernard Liautaud described the acquisition as a combination of healthy companies. "This is not a merger of two broken companies," he said.
Combined, the companies would have $736 million in annual revenue and expect to close the deal in the fourth quarter.
Liautaud added that the business-intelligence market both companies serve is underpenetrated. "It is an immature and fragmented market," only 10% to 15% penetrated, he said.
The two companies said on a conference call they expected a write off from the acquisition of $200 million to $300 million that will be taken over several years.
-By Mark Boslet, Dow Jones Newswires; 650-496-1366; mark.boslet@dowjones.com
