Computer Associates to Buy Concord Communications for 3.11 Times Revenue

Weekly Corporate Growth Report, Apr 18, 2005

The Deal: Computer Associates International Inc. has agreed to acquire Concord Communications Inc. for $17 per share, or $330 million, in cash. Computer Associates will also assume $20 million in debt, bringing the total value of the deal to $350 million. The transaction remains subject to customary regulatory approvals and the approval of Concord's shareholders. The deal is expected to close in within three or four months.

Discussion: Concord Communications develops software applications for communications systems. The company's products are used to monitor and troubleshoot the large global networks of corporations, telecommunications carriers, and managed service providers. The company also provides consulting, installation, and performance analysis services.

Computer Associates is a leading provider of business management software. The company's products include business intelligence, storage, security, and network management applications. In addition, Computer Associates offers services such as consulting, implementation, and training.

Computer Associates has been acquiring software technology companies to boost its own offerings. In 2004, the company acquired Miramar Systems, PestPatrol Inc., and Netegrity Inc.

The purchase of Concord will strengthen Computer Associates' competitive position in the network performance management area.