Magazine article Information Today

Open Market to Acquire Folio Corporation

Magazine article Information Today

Open Market to Acquire Folio Corporation

Article excerpt

Open Market, Inc., a leading provider of Internet commerce management software, has announced that it has signed a definitive agreement to acquire Folio Corporation, a leading supplier of software for managing business-critical information. Open Market claimed that the acquisition will result in unprecedented Internet-based solutions for companies engaged in the $16 billion information commerce market. The combination of Open Market and Folio addresses the opportunity for companies to exploit the Internet's pervasive infrastructure to streamline and enhance current operations and to build new information-based businesses.

Open Market will purchase 100 percent of Folio Corporation, a subsidiary of Reed Elsevier plc, for $45 million in equity and cash, subject to adjustment at the time of closing. The purchase consideration will be paid in the form of $25 million in equity, $15 million in cash, and $5 million in either cash and/or equity, depending on certain post-closing events. Shares issuable as purchase consideration are subject to staggered registration rights, half of which will be effective after June 30, 1997, and the remaining half after January 5, 1998. The acquisition will be accounted for as a purchase with a significant portion of the purchase price being allocated to in-process research and development and expensed at the time of closing.

It is expected that the acquisition will be closed in the current quarter, pending expiration of the applicable waiting period under the Hart-Scott-Rodino Act and satisfaction of certain closing conditions. Folio, with an employee base of approximately 190, will operate as the Folio Division of Open Market and will remain in Provo, Utah.

"The benefits from this acquisition extend throughout our customer base and across every industry," said Gary Eichhorn, president and CEO of Open Market. "Our combined solution will enable information industry participants to accelerate their move to the Internet for sales, distribution, and service. Open Market's Commerce Service Provider customers, who are using our software to deliver Internet commerce transaction services, will be able to add new value to merchants selling information-based products. For business-to-business industrial catalogers, the Open Market/Folio combination will provide a lightning-fast route to digital transactions from paper. …

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