Business Technology Optimization Boost: Mercury To Buy Kintana

Unlike the consolidation that is taking place in the enterprise applications software segment,which is being driven by cost savings,the Mercury deal is a bid to expand the business technology optimization market, where both companies are seeing double-digit sales growth.

Mercury, which posted a 22 percent increase in sales in the first quarter, said it would pay $125 million in cash and $100 million in common stock for Kintana, which bills itself as a provider of an IT governance software suite. Both companies, which started working together 18 months ago at the request of customers, are based here.

The deal puts Mercury,which is rapidly making a name for itself as a provider of software that allows CIOs to get a better return on investment from their current IT assets,in a position to reshape the landscape by combining the Mercury Optane business technology optimization products with the Kintana IT governance products, said David Murphy, vice president of corporate development at Mercury.

"This brings the governance or management capability of running IT as a business [together] with operational tools that provide seamless ways for CIOs, companies and service providers to effectively decide how to run IT and operationally execute," Murphy said. "By having these things tightly tied together, CIOs can set priorities, [handle] application rollouts and manage feedback from operations on how well they are providing service from an IT perspective."

Once the deal is finalized, Mercury will move to significantly expand the Kintana channel, Murphy said, adding that Kintana currently has a direct-sales force of about 20 and works with a few systems integrators and consulting firms including Accenture, BearingPoint and Deloitte & Touche.