After a high-profile failure earlier this year to beef up its professional services offerings with a strategic acquisition, Computer Associates International (CA) today disclosed that it has tried again and succeeded.
CA will acquire ReaLogic, a consulting firm specialising in enterprise networking, application development and systems integration.
CA's attempt earlier this year to purchase Computer Sciences Corp rapidly degenerated into an acrimonious hostile takeover bid, which died when CA let its offer expire in mid-March. The company then launched in April its own professional services unit in a move that CA chairman and chief executive officer Charles Wang at the time jokingly called "plan B."
The ReaLogic acquisition, which was made for an undisclosed sum, is the first in a series of purchases designed to meet increasing customer demand for turnkey, best-of-class consulting and professional services, according to Chris Wagner, executive vice president with CA's Global Professional Services subsidiary.
"We see ReaLogic as a company that can certainly accelerate our drive into professional services," Wagner said.
ReaLogic will become a part of CA's Global Professional Services. C. David Snyder, ReaLogic's chairman, president and CEO, will be head of the subsidiary, which is run separately from CA's product-related units, it said.
The purchase of ReaLogic is part of CA's plan to have services constitute 30 percent of the company's total revenue, according to Wagner, who declined to reveal where that figure currently stands. The subsidiary currently employs around 1,000 people worldwide and is expected to grow both from continued new hires and from future acquisitions, he said.
Prior to the deal with CA, ReaLogic reluctantly had been pursuing the IPO (initial public offering) route as a way to raise cash, according to ReaLogic's Snyder, who compared the company to a Lamborghini without gas.
"We clearly weren't infatuated with the process but it was what we needed to fuel our growth," Snyder said. "When you're growing a business as an entrepreneur you lack one thing for sure and that's capital."
Between five and 10 companies expressed interest in purchasing ReaLogic, but CA won out in part because of its technology-agnostic stance, Snyder said.
CA's Global Professional Services subsidiary will continue to be agnostic on products, even with CA's flagship Unicenter enterprise management software, which last year contributed US$2 billion to the company's coffers in license and maintenance fees, CA's Wagner said.