CA Acquires Privately Held Wily Technology; Expands It Management Capabilities For Enterprise Applications
* All-Cash Transaction of $375 Million
* Webcast Today at 10 a.m. EST at http://ca.com/invest
ISLANDIA, N.Y. and BRISBANE, Calif., January 5, 2006 – CA (NYSE:CA), one of the world’s largest IT management software companies, today announced that it has signed a definitive agreement to acquire Wily Technology, a leading provider of enterprise application management solutions, for $375 million in an all-cash transaction.
“Application management is key to enabling customers to manage IT environments from end-to-end — from applications to infrastructure — and delivering on CA’s Enterprise IT Management vision,” said CA President and CEO John Swainson. “Wily is the leader in this sector and the fastest growing major company in a fast growing market. With this acquisition, CA will be the only company to address the management of applications, IT assets and users across all hardware and software, from the mainframe to the distributed environment.”
Wily provides end-to-end visibility into customer transactions in real time, and enables IT organizations to successfully manage the health and availability of their critical enterprise applications and infrastructure. Its solutions allow IT managers to rapidly detect and diagnose application slowdowns and failures, and better assess the impact of application performance on business success, resulting in better customer service and higher IT productivity.
Wily’s revenues grew by 48 percent in 2004 (audited) and 2005 revenues are expected to increase 75 percent (unaudited), a rate that is more than three times as fast as the overall growth of its market segment. CA expects Wily to contribute approximately $72 million of revenue in CA’s fiscal year 2007 on a ratable basis. Billions of web transactions a day are monitored by Wily’s software — more transactions for more customers than all its competitors combined. Wily’s technology is installed in more than 450 leading enterprises and government organizations worldwide.
Wily is positioned in the Leader’s Quadrant of Gartner Inc.’s Magic Quadrant for J2EE Application Server Management, 2005 (1); according to Gartner, leaders are vendors that are performing well today, have a clear vision of market direction and are actively building competencies to sustain their leadership position in the market. Additionally, Gartner is forecasting that the Application Management market, based on new license revenue, will exceed $1 billion in 2007, and is estimated to reach $1.355 billion in 2009 (2).
“Wily has defined and become the leader in this sector by focusing on customer success,” said Wily Technology CEO Dick Williams. “With CA, we can reach more organizations than ever before with our innovative technology, expert people and best practices. And, by accelerating our development and integrating our technology with CA’s solutions, we will be able to deliver a scope of management products unmatched by anyone else. I’m excited to be joining the CA team and for the opportunity to build a best-in-class enterprise management software company.”
At the close of the transaction, Wily will operate as the Wily Technology division within CA’s Enterprise Systems Management business unit. Williams will join CA and lead the division, and Lewis Cirne, Wily’s founder and chief technology officer will also join the Company. CA expects to retain most of Wily’s more than 260 employees. Product integration roadmaps will be available about 30 days after the close of the acquisition.
The acquisition is expected to be completed within three months, pending regulatory approval, and is expected to be dilutive to CA’s earnings per share in fiscal 2006 and neutral to earnings per share in fiscal 2007.
CA will host a conference call to discuss the transaction at 10 a.m. EST today. Investors and media can access the call via webcast at http://ca.com/invest, or by calling 800-729-6829.
(1) Gartner Research, “Magic Quadrants for J2EE Application Server Management 2005” by Cameron Haight, April 4, 2005.
(2) Gartner Research, “Forecast: Enterprise Management Software, Worldwide, 2004-2009” by Laurie Wurster and Fabrizio Biscotti, July 12, 2005.
About the Magic Quadrant
The Magic Quadrant is copyrighted April 4, 2005 by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner’s analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the “Leaders” quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
CA (NYSE: CA), one of the world’s largest information technology (IT) management software companies, unifies and simplifies the management of enterprise-wide IT. Founded in 1976, CA is headquartered in Islandia, N.Y., and serves customers in more than 140 countries. For more information, please visit http://ca.com.
Wily is the market-leading provider of Enterprise Application Management solutions. By providing end-to-end visibility into customer transactions in real time, Wily’s products enable companies to successfully manage the health and availability of their critical Web applications and infrastructure. Wily’s collaborative management approach allows enterprises to rapidly detect and diagnose application slowdowns and failures, and better assess the impact of application performance on business success. This means better customer service, more stable revenue streams, and higher IT productivity.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release regarding the proposed transaction between CA and Wily, the expected timetable for completing the transaction, future financial and operating results, benefits and synergies of the transaction, future opportunities for the combined company and products and any other statements regarding CA’s or Wily’s future expectations, beliefs, goals or prospects constitute forward-looking statements. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered forward-looking statements. A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the parties’ ability to consummate the transaction; the conditions to the completion of the transaction may not be satisfied; the regulatory approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule; the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the merger; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected time-frames or at all; CA may be unable to successfully integrate Wily’s operations into those of CA; such integration may be more difficult, time-consuming or costly than expected; revenues following the transaction may be lower than expected; operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the transaction; the retention of certain key employees at Wily; the risks and uncertainties associated with the CA deferred prosecution agreement with the United States Attorney’s Office of the Eastern District, including that CA could be subject to criminal prosecution or civil penalties if it violates this agreement; the risks and uncertainties associated with the agreement that CA entered into with the Securities and Exchange Commission (“SEC”), including that CA may be subject to criminal prosecution or substantial civil penalties and fines if it violates this agreement; civil litigation arising out of the matters that are the subject of the Department of Justice and the SEC investigations, including shareholder derivative litigation; changes to the compensation plan of CA’s sales organization may encourage behavior not anticipated or intended as it is implemented; CA may encounter difficulty in successfully integrating acquired companies and products into its existing businesses; CA is subject to intense competition in product and service offerings and pricing and increased competition is expected in the future; certain software that CA uses in daily operations is licensed from third parties and thus may not be available to CA in the future, which has the potential to delay product development and production; if CA’s products do not remain compatible with ever-changing operating environments, CA could lose customers and the demand for CA’s products and services could decrease; CA’s credit ratings have been downgraded and could be downgraded further which would require CA to pay additional interest under its credit agreement and could adversely affect CA’s ability to borrow; CA has a significant amount of debt; the failure to protect CA’s intellectual property rights would weaken its competitive position; CA may become dependent upon large transactions; general economic conditions may lead CA’s customers to delay or forgo technology upgrades; the market for some or all of CA’s key product areas may not grow; third parties could claim that CA’s products infringe their intellectual property rights; fluctuations in foreign currencies could result in transaction losses; and the other factors described in CA’s Annual Report on Form 10-K for the year ended March 31, 2005, and any amendments thereto, and in its most recent quarterly reports filed with the SEC. CA and Wily assume no obligation to update the information in this communication, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
Copyright © 2006 CA. All Rights Reserved. One Computer Associates Plaza, Islandia, N.Y. 11749. All trademarks, trade names, service marks, and logos referenced herein belong to their respective companies.
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