Borland to acquire Starbase Corp.

Borland Software Corp. has agreed to acquire fellow application development software maker Starbase Corp. for US$24 million in cash, the companies said Wednesday.

Borland, based in Scotts Valley, Calif., said the purchase of Starbase will help it offer its customers a single, fully featured software set for managing all phases of application design, testing and deployment. Borland will begin selling Starbase products through its own channel once the deal closes, the company said.

Borland said it hopes to complete the acquisition, an all-cash tender offer to buy outstanding shares of Starbase for US$2.75 per share, during the fourth quarter. Shares of Starbase (SBAS), located in Santa Ana, Calif., ended trading Tuesday on the Nasdaq exchange at US$0.80.

Starbase currently has around 235 employees, and while Borland expects some consolidation in administrative areas, major layoffs are not planned, Borland Chief Executive Officer Dale Fuller said during a conference call with analysts.

“We plan to keep most everyone in the company because of the growth we see. There’s a lot of things we need to do from an R&D standpoint,” Fuller said.

Borland intends to keep “significant operations” at Starbase’s Santa Ana headquarters, and to leave in place the R&D (research and development) staffers working there, said Frank Slootman, Borland’s senior vice-president of software development.

Borland is now evaluating Starbase’s portfolio and deciding on the fate of its products, but most will survive and continue to be developed and sold under their current names, executives said. Increasing integration between Starbase’s StarTeam change and workflow management software and Borland’s JBuilder Java development software will be a priority, Slootman said.

JBuilder is already configured to mesh with StarTeam, allowing developers working within JBuilder to, for example, check files in and out of StarTeam and record changes without leaving JBuilder. But Borland plans to “take (the integration) up another couple of levels” and more tightly connect the products’ technical underpinnings, Slootman said.

The Starbase purchase is part of Borland’s plan to take advantage of the depressed economy and its own resources to expand its “development footprint,” Fuller said.

“Several years ago, (managerial) efficiency meant keeping the ship afloat and correcting its course over time. Now it means leveraging our assets,” he said. “We have been in the expansion phase of our plans for the last quarters.”

So far this year, Borland’s purchases include software developers Redline Software Inc. (better known as VMGear), Highlander Engineering Inc., Brazilian IT training firm Advanced Training Center Ltd. and assets from Swedish developer BoldSoft MDE AG.

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