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AttachmateWRQ snaps up NetIQ for $495M

Margie Semilof

There was consolidation among enterprise management vendors with this week's acquisition of NetIQ Corp. by AttachmateWRQ in a cash deal worth about $495 million.

NetIQ specializes in security and systems management software for Windows shops. Within its portfolio, NetIQ makes a line of tools for securing Microsoft's Active Directory and for Group Policy administration. AttachmateWRQ manufactures host integration and terminal emulation software. San Jose, Calif.-based NetIQ will function as an independent business unit of AttachmateWRQ, in Seattle.

Microsoft licensed some of the original code for Microsoft Operations Manager (MOM) from NetIQ. "It's clear that Microsoft has taken over that area," said J.P. Garbani, an analyst at Forrester Research Inc., in Cambridge, Mass. "MOM and the work that Microsoft is doing has undermined NetIQ."

Together, AttachmateWRQ and NetIQ will comprise a $400 million company with 40,000 customers in 60 countries, according to the companies.

The vendors don't have overlapping markets, but experts say the merger of two businesses where one becomes an independent unit of the other is usually difficult. "There is a tendency for the acquired firm to act like an independent entity, so they don't always get the leverage of the association," said Richard Ptak, a principal at Ptak, Noel & Associates, in Amherst, N.H.

The transaction is expected to close in 90 days, both companies said.

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