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Peregrine Nabs Remedy for $1.08 Billion

June 11, 2001 By Thor Olavsrud     Feedback

The enterprise software maker is looking to enter the small-to-midsize business market, and it plans to acquire Remedy Corp. to give it a leg up.

San Diego-based enterprise software maker Peregrine Systems Monday moved to acquire IT Service Management and Customer Relationship Management (CRM) provider Remedy Corp. in a cash and stock transaction valued at $1.08 billion based on Remedy's closing price Friday.

Peregrine said the acquisition, which has already been approved by the boards of both companies, will extend its scope, depth and reach. The company is hoping the addition of Remedy's technology will advantageously position it to capture the small to midsize business market.

Under the terms of the agreement, Peregrine will acquire all Remedy's outstanding equity for a combination of cash and shares of Peregrine stock. Peregrine (NASDAQ:PRGN) will issue Remedy (NASDAQ:RMDY) shareholders 0.9065 Peregrine shares and $9 for each share of Remedy. The company said it expects to issue about 27.9 million shares as part of the transaction, which it will account for under the purchase method.

Peregrine expects to be off and running once the acquisition is finalized. It anticipates that the transaction will be accretive to cash earnings in the current fiscal year.

"We are delighted to reach agreement with Remedy on an acquisition that will allow us to serve a broader range of customers with an expanded line of products and development platforms," said Steve Gardner, chairman and chief executive officer of Peregrine. "We plan to enhance and integrate Remedy technologies as part of our lifecycle infrastructure management offerings to meet growing market demand for these capabilities. In addition, Remedy contributes a powerful distribution channel to small and midsize customers. We stand committed to supporting that channel, ensuring that customers achieve the same competitive benefits we offer in helping larger enterprises achieve a state of frictionless business."

Peregrine has already laid out plans as to how it will integrate Remedy's technologies. It noted that Remedy's development environment is highly adaptable and flexible -- a must for customers seeking a highly customized offering -- while Peregrine's applications provide best practice workflow for enterprise customers. The combined company will offer a unified technology platform including Remedy's Action Request System (AR System) development environment and Peregrine's open architecture and B2B Integration suite. The company also plans to integrate the AR System with its Infrastructure Management, Employee Relationship Management and B2B Relationship Management products.

Still, the company will keep two separate product lines. Remedy's IT Service Management suite will be the company's flagship solution for the small-to-midsize market while Peregrine products will remain aimed at large enterprise customers.

The transaction is still subject to shareholder and regulatory approval. The companies' did not disclose when the deal is expected to close.

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