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CA buying Platinum Tech
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March 29, 1999: 10:49 a.m. ET
Business software deal, valued at $3.5B, triples Platinum stock value
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NEW YORK (CNNfn) - In one of the largest deals involving business software companies, Computer Associates International said Monday it will acquire all outstanding shares of Platinum Technology International for $3.5 billion.
Islandia, N.Y.-based Computer Associates (CA) said the deal values Platinum Technology (PLAT) shares at $29.25 each. The stock closed Friday at about one-third that price, $9.875.
The acquisition price is below Platinum's 52-week high of $34.3125, reached last July.
Platinum, based in Oakbrook Terrace, Ill., provides software and consulting services to help corporations manage information technology. Among the applications of its software are systems and database management, e-commerce and year 2000 re-engineering.
"This transaction provides tremendous synergies in products, markets and services with very little overlap, creating exciting opportunities for CA in many new and emerging markets," Computer Associates President Sanjay Kumar said.
Computer Associates said the boards of both companies have approved the transaction. Credit Suisse First Boston is underwriting a $4.5 billion credit facility for the deal, replacing the company's existing $2.6 billion in credit.
The company said it expects the acquisition to add 25 cents a share to earnings for the 12 months following completion, not including any costs for restructuring and in-process research and development. It also said it expects the acquisition to generate an additional $450 million of cash from operations.
Computer Associates shares closed Friday at 33-15/16, down 7/8 from Thursday. 
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