Sun buys Tarantella for $25m

Sun Microsystems Inc. has agreed to buy Tarantella Inc., a vendor of tools to secure remote access to applications, for about US$25 million in cash, the companies said Tuesday.

The deal still requires approval from regulators and Tarantella shareholders, but the companies expect to complete it by the end of September.

Tarantella, based in Santa Cruz, California, developed its Secure Global Desktop software to make it possible to deliver access to enterprise applications over the Web. It sells the product online, through its own sales force and through a network of resellers including, in the U.S., Tridex Systems Inc. and Prime Care Technologies Inc.

Directors and executives at Tarantella, between them holding 4.7 percent of Tarantella stock, have already accepted the deal, according to a filing with the U.S. Securities and Exchange Commission. That filing also indicates that Tarantella has agreed not to solicit other bids for the company, and that it will pay Sun compensation of $1.2 million if it terminates the merger.

Sun, of Santa Clara, California, will pay Tarantella up to $2 million in six stages while the deal is closing, in return for licenses and engineering support from Tarantella for its Secure Global Desktop software.

A Sun spokeswoman declined to comment further ahead of a conference call the companies have scheduled for 1:30 p.m. PT Tuesday.

Tarantella cancelled a conference call previously scheduled to take place Thursday, after the release of its financial results for the second quarter of its fiscal year 2005.