Novell to be acquired by PE firms for $2.2 bn

Infrastructure software provider Novell Inc yesterday agreed to be bought by an investor group led by private-equity firms, for about $2.2 billion, that also includes the sale of some 882 patents to a Microsoft-led consortium.

Attachmate Corp, which is owned by an investment group led ed by Francisco Partners, Golden Gate Capital and Thoma Bravo, will buy Waltham, Massachusetts-based Novell for $6.10 a share in cash, a premium of 9.1 per cent to Novell's closing price on 19 November 2010.

Novell will also sell some 882 patents to CTPN Holdings, a consortium of technology companies led by Microsoft Corp, for $450 million, which is part of the total takeover price tag.

Novell put itself for sale in March 2010 after it rejected a $2 billion unsolicited takeover offer as inadequate from Elliott Associates, an institutional investor holding 8.5 per cent of the company stock.

Although many companies showed interest in Novell, it failed to find serious buyers as the company struggled to compete against larger rivals and sustain growth.

Even though the company's sales have declined for three of the past four years, Novell is considered a good buy by analysts since it is sitting on a substantial cash pile as well as its in-depth knowledge to the Linux operating system.