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Sybase acquires AvantGo

Enterprise software maker Sybase moved to strengthen its position at the front of the line in the burgeoning mobile/wireless middleware market last week by signing a definitive agreement to acquire AvantGo. The all-cash deal, reportedly valued at approximately $38 million, is expected to close by the end of Q1/2003.

Sybase said it intends to operate AvantGo under its iAnywhere Solutions subsidiary, which also develops software for the mobile market. With an estimated 73% of the market, iAnywhere is the market-leading provider of mobile, embedded and workgroup databases and mobile middleware solutions. The company claims more than 7 million seats of iAnywhere Solutions technology in more than 10,000 customer sites worldwide.

''Today's announcement is an important part of iAnywhere Solutions' strategic plans to fuel new growth in the mobile and wireless arena,'' said Sybase CEO John Chen in a statement issued on Friday. ''I am excited by the opportunities of the new combined entity, and am confident in iAnywhere Solutions' ability to execute on its strategy to drive future growth.''

The market for the software that connects an increasingly mobile workforce with the corporate home base is one of the fastest growing in the tech sector. IDC analysts have predicted that the mobile middleware market will grow from $227 million in 2001 to $1.7 billion by 2006.

The acquisition of AvantGo will give Sybase an end-to-end enterprise wireless solution, Chen said, by combining the iAnywhere mobile database and synchronization technologies with AvantGo's offline products for Web content, corporate data and applications.

AvantGo was early to the battle for wireless systems. It was founded in 1997 and is probably best known for its My AvantGo product, which provides Web content to handheld devices. The software can be deployed within an enterprise or delivered through the hosted My AvantGo service, which has some 7 million registered users. Sybase said it would continue to support and develop the product.

Even with such a respectable customer base, AvantGo has been losing market share. The company recently restructured and posted a net loss of $5.5 million, or 16 cents per share, for the quarter ended Sept. 30, 2002.

Sybase is expected to close AvantGo's Hayward, Calif., office and move an estimated 75 to 90 of the company's 120 employees to its new headquarters in nearby Dublin, which opened earlier this year. However, AvantGo's recently appointed CEO, David Pratt, and other members of the administrative staff will not stay on.

About the Author

John K. Waters is a freelance writer based in Silicon Valley. He can be reached at john@watersworks.com.

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