News

Progress buys DataDirect for $88M

• By Jack Vaughan, Michael W. Bucken
• December 5, 2003

Progress Software Corp. continued to broaden its product portfolio today by agreeing to acquire ODBC and JDBC data-access toolmaker DataDirect Technologies for $88 million in cash.

DataDirect emerged from the roots of Q+E Software and TechGnosis software, which were both part of the DataDirect family tree that evolved at Intersolv in the mid-1990s. Intersolv later became Merant, and in 2001, the DataDirect business was purchased for just under $30 million by Golden Gate Capital, a San Francisco-based investment firm. Privately held DataDirect has maintained annual revenue totals in the mid-$40 million range since then.

DataDirect will be run as a semi-autonomous unit within the expanding Progress family of software companies, which include Sonic Software and Peer Direct, said Norman Robertson, senior vice president of finance and administration and chief financial officer at Progress. He said the unit will continue to operate out of its Rockville, Md., facility.

Robertson said he expects DataDirect to maintain its ''healthy profit margins'' while quickly boosting business using Progress distribution channels.

Analysts said the acquisition should be a good one for Progress, which has successfully squeezed profits from most of its acquisitions. ''[Progress is] a long-term survivor by being very conservative in running their business,'' said Damian Rinaldi, an analyst at the FAC Equities unit of the First Albany Cos. Investment firm. ''Progress knows how to take a business like that and mine it.''