RealTime IT News

Vector Closes Corel Acquisition

Vector Capital Group Thursday concluded the acquisition of Ottawa-based Corel , closing the books on the software company's tenure as a public company.

The San Francisco-based venture capital firm, which specializes in "special opportunity investments" in software and IT services, will acquire all of the common shares of Corel for $1.05 per share, and Corel said its shares ceased trading when the NASDAQ closed on Thursday. Shares on the TSX are expected to cease trading on Tuesday.

"This is an exciting day for Corel as we begin a new chapter in the company's history," said Derek Burney, president and CEO of Corel. "Vector is a committed and enthusiastic partner who will work with Corel to build customer relationships and capitalize on teh company's poetntial. We look forward to a successful future for Corel as we devote even greater focus and energy to delivering productive software solutions to our customers and partners worldwide."

On Friday, an Ontario court granted approval of the acquisition following a shareholde r vote approving the deal. A dissident shareholder group made an eleventh hour attempt to block the deal, but failed to do so.

In a statement released late Friday, Corel quoted Canadian Justice James Chadwick said: "I am satisfied that the applicants have complied with all of the terms of the interim order and also the provision of the Canada Business Corp. Act and the Ontario Business Corporations Act."

From initial public indications, the newly-reorganized Corel will concentrate on new versions of its WordPerfect word processing and CorelDraw graphics software packages, but whether there will be job cuts, or product reductions is less clear.

"Our goal remains to be on profitability and will make decisions required to achieve that goal," Vis said, not ruling out the possibility of job cuts. She also said from all indications Vector intends to stay with the current top management of Corel.

What is less clear, is what course the newly-private company will take in regards to its software product mix.

Greg Wood, a spokesman for Corel's WordPerfect division said research is ongoing on whether to devote resources to creating future Linux-versions of its WordPerfect software.

"We are prepping the next version of WordPerfect and reviewing exactly which operating systems it will run on. Our big push is behind WordPerfect 11," Wood said.

Neither Vis, nor Wood would commit to precise release dates for the next version of WordPerfect, Corel Draw, or other software product release plans.

Alex Slusky, managing partner at Vector Capital, said "We are pleased to complete this transaction and consummate a union which will benefit Corel and its customers. We are committed to working with Corel's dedicated employees to provide the highest quality software and services to our diverse base of partners and customers worldwide."