Software AG to acquire Terracotta

Monday, May 23, 2011

German applications developer Software AG (Frankfurt: SOW) has agreed to acquire US IT solution provider Terracotta, the former announced in a statement without reporting the price tag.

The acquisition will allow Software AG to increase revenue by offering to new and existing clients mobile technology, cloud distribution and virtualization, and will enable Software AG to provide a full Platform-as-a-Service (PaaS) in the midterm.

"The integration of Terracotta's technology with our product portfolio is a step in ensuring that our customers can benefit from the convergence of cloud computing, the mobile web, complex event processing and real-time, multi-party collaboration," said Software AG CTO Wolfram Jost.

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Terracotta designs and develops software products for enterprise application scalability, availability and performance optimization. Some of the company's products include Enterprise Ehcache for the optimization of enterprise application scale and performance, and BigMemory, a Java add-on application for Enterprise Ehcache for storing data. The company was founded in 2003 and has more than 55 employees in development centers of open source in San Francisco and New Delhi.

Software AG expects to release the first combined products in Q4, and the company's cloud based PaaS rollout will be in 2012.

The transaction has been approved by Software AG's board. It is subject to customary closing conditions, including regulatory approvals, and is expected to close in June.

Software AG posted a 43% year-on-year increase in net profits, to 40mn euros (US$58.6mn), for the first quarter of 2011. The company's quarterly revenues rose 9%, to 273mn euros.