Progress buys DataDirect for $88M
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
Jack Vaughan is former Editor-at-Large at Application Development Trends magazine.
Mike Bucken is former Editor-in-Chief of Application Development Trends magazine.