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CA Pays $375M For Wily App Management

CA said it has agreed to acquire application management maker Wily Technology for $375 million in cash. It's the latest move for the company to vault past rivals IBM and HP in the lucrative management software space.

Wily, considered a leader in Java application management by Gartner, provides the tools that allow IT managers to detect and diagnose application slowdowns and failures as they occur and before they negatively impact system performance.

Such software is crucial at a time when corporations are counting on the real-time performance of billions of computer transactions to achieve business goals, said CA CEO John Swainson on a conference call.

"Application management is key to enabling customers to manage IT environments from end-to-end -- from applications to infrastructure -- and delivering on CA's Enterprise IT Management vision," Swainson said.

The market may agree: Gartner expects revenues in the field to top $1 billion next year and $1.3 billion by 2009.

With 450 customers, Wily is leading this market growth, Swainson said, noting that Wily's software manages customer service applications for Cingular Wireless, applications that run Honda's auto factories and order-fulfillment software for FedEx.com.

He said that the Brisbane, Calif., company's revenues grew by 48 percent in 2004, with 2005 revenues expected to increase 75 percent, or more than three times as fast as the growth of the market segment.

If the deal is consummated in three months as planned, CA expects Wily to contribute approximately $72 million of revenue in CA's fiscal year 2007, said CA CFO Jeff Clarke.

Clarke said Wily will operate as the Wily Technology division within CA's enterprise systems management business unit, which is led by current Wily CEO Dick Williams.

Lewis Cirne, Wily's founder and CTO, will also join CA, which expects to retain most of Wily's more than 260 employees.

Product integration roadmaps will be available about 30 days after the close of the acquisition.

Adding Wily would make CA an even more formidable competitor versus IBM, HP and BMC Software, and even EMC (through the Smarts buy) in the multi-billion-dollar management software market.

CA has been making strides since turning around from its accounting improprieties of a few years ago.

In the last two years or so, the Islandia, N.Y., company has acquired network management provider Concord Communications, single sign-on provider Netegrity and archiving specialist iLumin.