February 1, 2002 10:25 AM PST

Adobe buy continues move to server side

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Adobe Systems announced Friday that it has made a $72 million offer to acquire Accelio, a small Canadian software maker that has become the subject of a bidding war.

Accelio specializes in server software for routing and storing data submitted by people filling out electronic forms. Adobe executives said the company's products would help extend its Acrobat line, already the leading format for creating and sharing online documents.

"What Accelio brings to Adobe are products that support companies that use Acrobat for designing forms," said Shantanu Narayen, executive vice president of worldwide products for Adobe. "This is just a natural extension...of our network publishing vision."

Adobe's offer follows an earlier bid by Open Text, a larger Canadian software maker specializing in networking and content collaboration tools. Accelio board members rejected Open Text's offer of $42.8 million as undervaluing the company, but several of Accelio's largest shareholders have said they will accept the Open Text bid.

In a statement released Friday, Accelio urged shareholders to withdraw any shares tendered to Open Text. Canadian law requires that any acquisition receive approval from a special court and two-thirds of shareholders. Ottawa, Ontario-based Accelio, which has about 650 employees, said it expects to have a shareholders meeting in late March.

Adobe's all-stock offer values Accelio's stock at $2.83 a share, a significant premium over the closing price of $1.92 Thursday. Accelio shares were up more than 45 percent, at $2.80, in early trading after the Adobe bid was announced Friday.

Accelio's products include Capture, server software that captures and stores data submitted by people filling out electronic forms; and Integrate, another server product that routes forms through a corporate or government network.

Accelio's products already support Acrobat as a document format, Narayen said, so incorporating the company's products into Adobe's should be an easy transition.

"Acrobat is becoming an indispensable tool on the desktop," Narayen said. "This completes that package with back-end products that really make Acrobat work throughout the enterprise."

The Accelio bid is Adobe's second major move this week to delve further into server software. On Monday, the company released AlterCast , a server application for managing images throughout a business.

IDC analyst Joshua Duhl said the shift makes sense as Adobe looks for ways to leverage its core business in desktop publishing and imaging applications. "Moving toward the server side is where the real revenue is going to pick up for them," he said.

 

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