Corel buys XML developer SoftQuad

In a bid to get ahead on XML (Extensible Markup Language) technology, Corel Corp. said Tuesday that it has agreed to acquire Toronto-based XML-developer SoftQuad Software Ltd. in an all-stock transaction valued at US$37 million.

With the XML technology in-house, Corel said it now has the technologies needed to deliver a product that will allow customers to create, manage and simultaneously publish content across multiple delivery channels. SoftQuad has partnerships with makers of content management systems, Corel said.

The acquisition is “a giant leap forward in our foray into cross-media publishing,” said Derek Burney, Corel president and chief executive officer. Corel plans to focus its business beyond print, he said, and will move to offering tools that allow publications to be created once for both print and online use. This market, which will include Internet-based catalogs and the conversion of legal documents to Web formats, will be a multi-billion dollar market, Burney said.

The new Corel will attempt “to create leadership in markets that have yet to be defined. No more head-to-head with Microsoft,” Burney said. Microsoft Corp. invested US$135 million in Corel last October and Corel has pledged that its products will work with Microsoft’s forthcoming .Net initiative.

Corel’s ties with Microsoft had no bearing on the deal, Burney said, as the company is “exploring our own strategy” and has been at work on deals since January.

Additionally, the XML capabilities in WordPerfect, Corel’s word processing software, will also be expanded. This is something Corel expects to especially benefit its customers in the government and legal community. XML will be integrated into all Corel products, Burney said, noting that some, such as CorelDraw, already contain the technology.

The software maker said the SoftQuad buy builds upon the takeover of graphics software developer Micrografx Inc. in July. The SoftQuad deal is expected to close within six weeks and already has the needed shareholder approval, Burney said.

Ottawa-based Corel has been trying to reposition itself after it landed in a downward spiral because of management changes, layoffs, losses and an unclear business strategy. In January Corel announced it would refocus on graphics software.

In acquiring SoftQuad and Micrografx, Corel has embarked on “the first step in the growth phase of our business,” after spending the last year cutting costs, Burney said.

“All the key pieces are there” for Corel to be a major company again, Burney said, noting that Corel will likely not pursue further acquisitions. “There’s really nothing missing at this point.”

Corel, in Kanata, Ont., can be reached at SoftQuad, in Toronto, can be reached at

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