Beefing Up

webMethods to add R&D team in $31.3 million deal

FAIRFAX, VA.  January 26, 2001  webMethods, a software solutions provider for business-to-business integration (B2Bi), recently announced that the company has entered into a definitive agreement to acquire IntelliFrame Corp., a wholly-owned subsidiary of Computer Network Technology (CNT) Corp. The deal is scheduled to close by March 31, 2001.

As a result of the deal, webMethods will acquire the IntelliFrame 15-member, Boston-based research and development (R&D) team. The move represents an effort to broaden the scope of webMethods' integration solution. With the R&D organization developing for webMethods, the combination solution aims to provide customers with highly personalized interfaces that integrate business processes, which require human intervention, approval or other manual processing.

The total purchase for the transaction will be $31.3 million, of which $8.8 million will be paid in cash and $22.5 million will be paid in newly issued shares of webMethods' common stock. (Congratulations to CNT, who bought IntelliFrame less than two years ago for only $2 million; a 15-fold return& not bad!) The company expects that substantially all of the purchase price will be recorded as an in-process R&D charge during the current quarter.

The company is positioned to get a leg up on the competition by adding intelligent routing and processing to the lineup at webMethods. The move indicates that the lines are blurring between Enterprise Application Integration (EAI), B2Bi, workflow, Electronic Data Interchange (EDI) and business process management.