Novell's Weird Public Journey Ends

What a long strange trip it has been for Novell (Nasdaq:NOVL). Once a major player (the major player) in network and enterprise operating systems, this software company saw larger rivals chew away its dominance, and management responded with a series of odd, questionable and sometimes flat-out bad acquisitions that never really seemed to work. With the company long in play, management has announced the sale of the company to a private equity group, bringing at least a temporary end to its odd journey as a public company. 

The Deal
Novell announced Monday morning that the board had accepted an offer from Attachmate Corporation to sell itself for $6.10 per share in a $2.2 billion all-cash deal. Attachmate is an investment group owned by Francisco Partners, Golden Gate Capital, and Thoma Bravo and already owns other software businesses like Attachmate and NetIQ, which sell products like terminal emulation and system/security management software to the corporate market.

Attachmate's deal is a mixed blessing for Novell's shareholders. Some may remember the glory days when Novell's stock traded above $30, though the stock has struggled to break $10 for the past decade. Novell did get a buyout bid of $5.75 back in March of 2010 and the stock has been in play ever since; accordingly, the 9% premium to Friday's close may not seem all that impressive. While management pointed out that this still presents a 28% premium to the pre-deal-chatter price, that is still a mixed blessing - not bad relative performance against large software companies like IBM (NYSE:IBM), Oracle (Nasdaq:ORCL), or Microsoft (Nasdaq:MSFT), but unimpressive against more dynamic names like Red Hat (NYSE:RHT) or the cloud computing darlings like Salesforce.com (NYSE:CRM) or VMWare (NYSE:VMW). 


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