Novell (Nasdaq: NOVL) fell 63 U.S. centsto $5.19 in morning trading Tuesday, after the software maker said it wouldbuy information consulting firm Cambridge Technology Partners (Nasdaq: CATP)for about $266 million in stock.
Cambridge Technology was up 28 cents at $3.38 in morning trading.
Cambridge’s president and chief executive officer, Jack Messman, will becomeCEO of Novell following the merger. Novell CEO Eric Schmidt will remainchairman and serve as chief strategist for the combined company.
Provo, Utah-based Novell said the acquisition “significantly expands” itsability to provide consulting support services.
Novell said it will exchange 0.668 of each of its shares for each outstandingCambridge share.
Schmidt said that the deal will help evolve new relationships with Novell’s customers and partners. After theacquisition, consulting services will make up more than one-third ofNovell’s business.
Last month, Novell reported a loss forthe quarter ended January 31st of $7.77 million, or 2 cents per share,compared with net income of $44.84 million, or 13 cents, in the year-earlierquarter. Revenue slipped to $245 million from $316 million.
Novell said that it is aiming to become an Internet services business, instead of relyingsolely on software licensing revenue. During the quarter, deliveries of Novell’s traditional packaged softwaredropped 62 percent year-to-year, while the company’s large networksite-license business grew by $9 million year-to-year to $184 million.
Netmanagement services, directory services and consulting all saw revenuedeclines in the quarter, the company said.