Novell To Buy SilverStream For $212 Million

Novell SilverStream

In a statement, Novell said the deal was part of its "plan to be a leading force in the commercialization of new Web services."

SilverStream's flagship product is SilverStream Extend, which it describes as a "comprehensive, integrated services environment that simplifies and accelerates the creation and delivery of Web services-oriented business applications."

In spending $212 million on SilverStream, Novell is buying a company that saw 2001 sales shrink by more than 10 percent to $67 million, while it racked up $122 million in losses. SilverStream has reported four consecutive money-losing fiscal years, with last year's loss being its greatest.

SilverStream will become a wholly owned subsidiary of Novell upon the deal's closing, the companies said in a joint statement.

"Novell is now well positioned to be a leader in the emerging and fast-growing market for Web services solutions," Novell Chairman and CEO Jack Messman said in the statement. "With Novell and SilverStream technologies, we will provide customers an ideal architecture to build out their next-generation systems, helping them deploy new technologies at low cost while getting the full value from prior IT investments."

Novell and SilverStream make a great match, added SilverStream CEO David Litwack.

In buying SilverStream, Novell is hoping the deal propels it into a significant competitive position against rivals IBM, Microsoft and Sun Microsystems in the growing Web services space.

In morning trading, Novell shares were up 2 cents, to $3.14 per share, still close to its 52-week low of $2.96.