News

Borland buys Starbase for $24 million

• By Jack Vaughan
• October 9, 2002

[October 9, 2002] -- Borland Corp. today said it intended to buy software life-cycle tool provider Starbase Corp. for $24 million in cash. Borland has also agreed to make $2 million in financing available to Starbase to fund its operations until the transaction is completed.

Borland President and CEO Dale Fuller said his company forged the deal in order to attain Starbase’s expertise and products for requirements management, software configuration management, defect tracking and collaboration. Such software is important as Borland continues to promote its prowess in enterprise application development.

Although 10-year-old Starbase has improved its homebrewed software with additions of Caliber requirements tracking software, content management traits and Web browser enhancements, the company has flagged in recent months. In an annual report filed March 31, 2002, Starbase’s balance sheet reflected an accumulated deficit of $179.7 million. Revenue for the fiscal year ended March 31 was $45.3 million.

Fuller said the purchase of Starbase would expand Borland’s “development footprint.” This expansion, he said, got going in full swing with Borland’s purchase of VMGear at the beginning of this year.

“We want to accelerate support of the application development life cycle,” he said. “This purchase complements our existing solutions.”

He noted that Borland struggled a few years ago, and he saw Starbase under similar stress of late. “One thing that gets solved with this is the issue of viability [for Starbase],” said Fuller, who indicated Starbase would remain “independent for a time.”

The move may not mark a complete slam dunk for Borland in terms of enterprise development, at least in the view of one SCM market competitor. Said Ellyn Winters-Robinson, vice president, marketing for SCM at MKS: “What we see as the market breakout in the SCM space is that there are desktop tools and enterprise tools. We would classify Borland as a specialist in desktop tools, and Starbase, the same.

“But the alternative for Starbase was not a good one,'' she added, ''for the company or for the SCM industry.''