Novell to buy SilverStream for $212 m

PROVO: Networking software maker Novell Inc. said on Monday it would buy
SilverStream Software Inc. for $212 million in cash in an effort to boost its
Web-based business offerings.

Novell plans to pay $9 per SilverStream share, a 75 per cent premium over
Friday's closing price of $5.14 on Nasdaq. The deal is expected to close as
early as July.

"That's a big premium," Jack Messman, chairman, president and chief
executive of Novell, said in an interview. However, SilverStream should have
about $100 million in cash when the deal closes, which would yield a net cash
outlay by Novell of about $112 million.

That would bring the per-share price, for 23.6 million outstanding shares, to
around $4.75, Messman said. The company expects the acquisition will be slightly
dilutive to earnings in 2003 and will add to earnings in 2004. For the current
fiscal year, the deal is expected to contribute one per cent to Novell's
revenue.

Novell does not anticipate any layoffs as a result of the acquisition of
Billerica, Massachusetts-based SilverStream, Messman said.

Acquiring SilverStream and its application server technology will give Novell
a boost in the competitive Web services arena, according to Messman. Application
server software is used by corporations to develop programs that run their
operations over the Internet.

International Business Machines Corp., BEA Systems Inc., Sun Microsystems
Inc. and Microsoft Corp. are among the companies racing to gain the leadership
position in the market. Under Web services, disparate computers and programs are
able to talk to each other to enable seamless electronic business.

Novell, a powerhouse in the early and mid-1990s with networking and directory
technologies, has watched other companies flourish in the Internet era. "We
believe the market has somewhat come back to us, even in this new space called
'Web services,'" he said. "Web services is the next frontier."

The deal has been approved by both boards of directors and 20.3 per cent of
the outstanding shares, including those held by SilverStream chief executive
officer David Litwack, have agreed to tender their shares.

(C) Reuters Limited.