Database vendor Informix yesterday said it will acquire loss making data warehouse vendor Red Brick Systems in a stock swap valued at $US35 million.
Under the terms of the agreement, each share of Red Brick common stock will be exchanged for a 0.6 share of Informix common stock. The transaction will be accounted for as a purchase, which is expected to close before the end of the year.
However, the deal still requires approval from regulatory agencies and Red Brick stockholders and the completion of an independent audit of Red Brick's financial results for the first three quarters of 1998.
Red Brick in its second quarter, ended June 30, 1998, posted a net loss of $US6.1 million or 48 cents per share, on revenue of $US7.7 million. For the previous first quarter, ended March 31, 1998, the company posted a net loss of $US3.9 million, or 32 cents per share, on revenue of $US9.4 million.
Informix said it will sell and support Red Brick's entire product portfolio, and integrate it into the Informix Decision Frontier product line following the purchase.
The deal will allow the companies to broaden their presence in the high-end data warehouse market, company officials said.
When the purchase is complete, Red Brick research and development, marketing and data warehouse consulting organizations will be folded into the Informix Data Warehousing Division, managed by Leonard Palomino, vice president and general manager.
Also Red Brick's customer support organisation, administrative and sales organisations will be integrated with Informix's respective divisions, which will result in some redundancies in some areas that will eventually be eliminated, said Bob Walters, vice president of business development for Informix's data warehouse unit.
Walters could not say how many people will be laid off as a result of the acquisition. Red Brick now has about 270 employees.