Novell Grabs E-Consultant for $266 Million

Analysts who predicted that the e-consulting sector would see some consolidation can smile, assured.

Cambridge Technologies Partners Inc. late Monday became the latest consulting firm to get snatched up as software maker Novell Inc. doled out $266 million in stock for it late Monday.

In this deal, Novell will exchange .668 shares of Novell common stock for every outstanding share of Cambridge, Mass.-based firm. The transaction is valued based on the closing price for Novell shares of $6.06 as of last Friday.

With this deal, Novell, which spun off its caching business in February, has aimed to improve its ability to deliver consulting support to customers and other IT services companies. Novell hopes the buy will accelerate its adoption of a solutions-selling model.

Novell board member Jack Messman, and president and chief executive officer of Cambridge, will assume the role of chief executive
officer at Novell. Novell CEO Eric Schmidt will continue his role as chairman of the Novell board of directors, with the added responsibility of chief strategist for the company.

“This is exactly what’s needed to propel Novell into a new realm of solutions-based relationships with customers and partners,” said Eric Schmidt, chairman and chief executive officer of Novell. “This move is strategically consistent with where we are taking Novell. The combined talent of Novell and Cambridge will bring us closer than ever to capturing the value of Novell’s net services strategy.”

Monday’s acquisition will be accounted for as a purchase and is expected to be completed in the third quarter of Novell’s fiscal 2001.