Macromedia To Buy Allaire

Macromedia announced plans this week to acquire Allaire for $360 million in a merger agreement the companies say will unite Web design and Web development capabilities to give developers a complete solution for building dynamic Internet initiatives. The merger agreement, which has been approved by both companies' boards of directors, will combine Macromedia's server, authoring and playback software with Allaire's Web development tools.

Rob Burgess, chairman and CEO of Macromedia, will be chairman and CEO of the combined company, which will still be known as Macromedia. Jeremy Allaire, CTO of Allaire, will be the CTO of Macromedia, reporting to Kevin Lynch, president of Macromedia products.

"This merger is a natural. Combining the technology and talent of Macromedia and Allaire will bring Web professionals a complete, accessible way to build engaging, dynamic Web sites and applications," said Burgess in a statement. "With this merger, we are taking the next logical step in empowering developers to create,and users to enjoy,a new generation of compelling Web experiences on everything from personal computers and set-top boxes to PDAs and beyond."

Macromedia's products include its authoring and server line, visual HTML editor Macromedia Dreamweaver and rich media producer Macromedia Flash. Allaire's arsenal includes cross-platform Web server ColdFusion and J2EE application server JRun.

The combined company will have a partner and customer base of more than 2 million professionals, including Web designers, application developers and Java programmers. It will evolve its Web development platform with support for open industry standard by delivering on Allaire's plan to bring the development model of ColdFusion to the J2EE standard. The next step will be to develop a set of reusable application services to enhance major software platforms like Java and Microsoft .NET.

The new entity will also work to help developers create uniform solutions for multiple devices. "Our combined user communities are at the forefront of defining today's Web experiences," Lynch said. "Together, we will lead the way in constructing the dynamic, multidevice Web of the future and deliver this across industry-standard application servers."

Macromedia will exchange 0.2 shares of its stock and $3 in cash for each Allaire share. The purchase is expected to close by the second quarter of 2001. Allaire has also granted Macromedia an option to acquire 19.9 percent of Allaire's stock.