Sun To Acquire Tarantella For $25 Million

Sun Microsystems on Tuesday said it plans to acquire Tarantella in a deal valued at about $25 million.

Under the terms of the deal, Sun agreed to pay 90 cents per share cash for Tarantella, a Santa Cruz, Calif.-based maker of remote application access software for Unix, Linux and Microsoft Windows environments.

The two companies already work together closely, with many of Tarantella's thin-client deployments running on Sun systems. Tarantella also partners with IBM and competes with Citrix Systems.

Sun executives are expected to comment on the deal during a scheduled conference call later on Tuesday.

Tim Watson, president of Tridex Systems, an Englewood, Colo.-based master reseller for Tarantella, said the acquisition comes as "a little bit of a surprise" since earlier talk of such a deal had recently died down.

"It could really be a boost for Tarantella," Watson said, adding that he's waiting for more information from Tarantella before passing judgment on the acquisition. "I don't anticipate any real strong problems. We just have to communicate well."

Tarantella has struggled financially, with the company reporting a loss of nearly $16 million and a revenue decline of about 10 percent in its fiscal year ended Sept. 30, 2004. Yet Tridex Systems is now seeing strong sales of Tarantella products. In the first calendar quarter of this year, the reseller grew Tarantella sales by 10 percent to 15 percent, and it's seeing the fastest growth on Windows platforms, where Tarantella directly competes with Citrix, Watson said.

Sun said it expects the acquisition, pending approvals, to close in the first quarter of its 2006 fiscal year, which ends in September.

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