Kana, SilkNet Tie $4.2 Billion Deal

Kana Communications Inc. and Silknet Software Inc. Monday announced a $4.2 billion merger that will combine two emerging players in the e-business software space.

Each outstanding Silknet share will be exchanged for .83 Kana shares. The deal has already been approved by both companies’ boards and is expected to close by the end of the second quarter.

The companies will integrate Kana’s (KANA) online customer communications services with Silknet’s (SILK) e-business platform to create applications that will allow business to manage their customer and partner relationships. The combined company will have about 450 e-business customers, including Microsoft Corp., E*Trade Group Inc. and eBay.

“This combination enables Kana to expand our leadership by providing a web-architected e-business platform and a comprehensive suite of customer-facing applications for marketing, sales and service communications,” said Michael McCloskey, Kana’s chief executive officer.

Jay Wood, Silknet’s chief executive officer, said the merger will allow the company to offer products that allow e-businesses to more proactively communicate with customers.

“Kana’s online customer communications solutions, combined with our unique customer-centric e-business applications and platform, delivers a powerful means for our customes to proactively interact, transact and communiate with their customers. The combined products will provide the platform for linking business-to-consumer and business-to-business functions within an e-business,” he said.

The companies plan to provide e-business with solutions enabling them to uniquely interact and transact with their customers. The products will also allow businesses to seamlessly integrate support requests, sales questions and order status queries into the same system to ensure inquiries are handled efficiently.