NUVO Network Management Inc. announced Tuesday morning that it has struck a deal to be acquired by Versata Enterprises Inc. in an all-cash transaction worth about $17.65 million.
Phil Weaver, CEO of NUVO Networks. (Darren Brown, OBJ)
The purchase values NUVO at 57 cents per share, a 103-per-cent premium over its closing share price of Dec. 10.
Versata, a privately held company based in Austin, Tex., has indicated that it intends to continue operating NUVO, which specializes in remote management and protection of IT infrastructures, as a stand-alone corporation within its family of software and services businesses. NUVO's board of directors unanimously recommended that shareholders vote in favour of the transaction.
"By joining the Versata family, we believe that NUVO will benefit from the leverage offered by a larger parent similarly focused on IT solutions, " said Phil Weaver, president and CEO of NUVO. "This acquisition is expected to enable a broader set of product and services offerings for our customers and to secure a continued focus on the substantial business benefits captured by customers who deploy NUVO's IT management services. "
Randy Jacops, CEO of Versata Enterprises, said NUVO customers will benefit from Versata's global scale and enterprise software expertise, which will enable the company to enhance and accelerate product roadmaps and provide more options and services.
"For Versata customers, NUVO's expertise in network management and hosting will extend our ability to reduce overall IT costs, " he said.
Versata comprises a number of leading enterprise solution providers and operates in 45 countries.
In an interview with the OBJ, Mr. Weaver said NUVO does not expect any fundamental alterations to the company's operations, although he said it was "not immediately clear" if Versata would choose to make changes as part of the acquisition.
"(Versata) was very attracted to the strength of the team that we have," said Mr. Weaver, adding that the company "will continue to do what it's doing" at its Ottawa location.
"We have a certified operation centre here which services Canadian and U.S. clients and delivers to clients in 50-plus countries. It would be disruptive to make changes (to that arrangement)."
Mr. Weaver said they he did not see any overlap between the two companies' offerings, and noted that NUVO would be able to help Versata reach out to its larger customers such as RBC and the Canadian government, and vice-versa.
"It's a really big, positive step for NUVO which integrates us into a world-class company with a strong presence in North America, Europe and Asia," he said. "Versata has a strong software focus, and this deal gets us a lot of leverage for us to grow and expand our market access."
The proposed transaction is expected to close in February, shortly after receipt of shareholder and court approvals.