Macromedia is merging with the Allaire Corporation into a company that will bear the Macromedia banner. The two firms announced a definitive merger agreement today.
The transaction is valued at approximately US$360 million on a fully diluted basis. Under the terms of the definitive merger agreement — unanimously approved by each company’s board of directors — Macromedia will acquire Allaire. Rob Burgess, chairman and CEO of Macromedia, will continue as chairman and CEO of the combined company. Jeremy Allaire, CTO of Allaire, will be the CTO of Macromedia, reporting to Kevin Lynch, president of Macromedia products. The company will have headquarters in San Francisco, and offices in Boston.
Macromedia is a company familiar to most Mac users, though Allaire is less so. The latter firm produces products in three categories:
“This merger is a natural. Combining the technology and talent of Macromedia and Allaire will bring Web professionals a complete, accessible way to build engaging, dynamic Web sites and applications,” said Burgess. “With this merger, we are taking the next logical step in empowering developers to create — and users to enjoy — a new generation of compelling Web experiences on everything from personal computers and set-top boxes to PDAs and beyond.”
In the merger, Macromedia will exchange 0.2 shares of its stock and $3 in cash for each Allaire share. The merger will be accounted for as a purchase combination and is expected to be accretive in Macromedia’s fiscal year 2002. This transaction is subject to certain closing conditions, including regulatory approvals and the approval of the Allaire shareholders, and is expected to close by the second calendar quarter of 2001. In connection with the merger agreement, Allaire has granted Macromedia an option to acquire 19.9 percent of Allaire’s stock, exercisable in certain circumstances.
David Orfao, president and CEO of Allaire, said the merger would bring together “complementary products, extensive channels, and first-rate service organizations into a powerful combined company that will lead the Web software industry.” The combined customer base of the two companies will top two million, ranging from Web designers to application developers to Java programmers.
The combined company will evolve its Web development platform with support for open industry standards, according to the merger announcement. The first step is to deliver on Allaire’s plan to bring the development model of ColdFusion to the J2EE standard. This will enable an approachable, productive solution for building applications on the Java platform using industry standard technologies such as XML and JSP, according to Orfao.
As the Web evolves, users will access content not just through personal computers but via a wide variety of devices, the two companies feel. The combined company will work towards empowering developers with an efficient way to develop once for multiple devices and then serve these applications without having to redevelop application logic for each device, Lynch said.
“Our combined user communities are at the forefront of defining today’s Web experiences,” he added. “Together, we will lead the way in constructing the dynamic, multi-device Web of the future, and deliver this across industry standard application servers.”
In announcing the merger, the companies said that combined, they’ll be able to:
According to a joint statement, the Allaire community will benefit from powerful Macromedia authoring and player software that enable the creation and deliver of engaging content, rich user experiences, and dynamic Web applications. The Macromedia community will benefit from approachable server technologies that empower teams of Web professionals to efficiently develop dynamic content and build Web applications, reps from both companies said.
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