Peregrine Takes the Cure

Tempe, AZ  June 11, 2001  Enterprise software company Peregrine Systems will acquire fellow software maker Remedy Corp. under a deal valued at $1.08 billion, according to an announcement today from the two companies.

In a statement, San Diego, Calif.-based Peregrine said the acquisition would extend the "scope, depth and reach" of its offering. Founded in 1981, Peregrine currently offers asset management and employee relationship management software, and the company operates an electronic trading network.

Remedy, founded in 1990 and headquartered in Mountain View, Calif., provides customer relationship management (CRM) software, as well as applications for what it calls information technology service management (ITSM), essentially a help-desk application targeted at small and midsize firms.

In addition to the combined product offerings, the agreement brings together the two organizations' customer bases. Remedy has targeted small and midsize customers, while Peregrine has marketed its products to global organizations with large, complex infrastructures. Peregrine said it would continue to support Remedy's direct and indirect distribution channel to small and midsize companies.

Under the agreement, Peregrine will acquire all the outstanding equity of Remedy in exchange for a combination of cash and shares of Peregrine stock. In exchange for each share of Remedy stock, shareholders of Remedy will receive $9.00 in cash and 0.9065 shares of Peregrine common stock.

The exchange represents a deal valued at approximately $1.08 billion based on the closing price of Peregrine shares on June 8, 2001 ($28.81). Peregrine expects to issue approximately 27.9 million shares in exchange for all the outstanding common stock of Remedy.

The definitive agreement has been approved by the board of directors of each company and is subject to approval by Remedy's shareholders, regulatory approvals and customary closing conditions.

Peregrine's share price on the NASDAQ dipped on the news of the acquisition, while Remedy's price rose sharply.

A statement from the two companies emphasized the complementary nature of their software offerings. The combined company will offer Peregrine's asset management products, employee relationship management applications and B2B connectivity solutions along with Remedy's business process authoring technology.

Remedy's ITSM suite will become the flagship solution for small to midsize organizations, while Peregrine will continue to target its own help-desk applications at large enterprise customers.

The Remedy acquisition extends Peregrine's recent shopping spree. In March, the company announced it was buying B2B integration provider Extricity in a stock-for-stock tax-free reorganization valued at approximately $168 million.

In December, Peregrine completed the acquisition of the Tivoli Service Desk suite of products for $105 million, while in April 2000, Peregrine acquired e-commerce network services provider Harbinger for about $2.1 billion.