Marshal buyer gets bought and goes private

Software developer AttachmateWRQ is to acquire security firm NetIQ. The two companies have signed a deal that will close in the next three months.

AttachmateWRQ and NetIQ will together form a US$400 million (NZ$650 million) company, with around 40,000 customers in 60 countries. NetIQ is an integrated systems and security management products vendor, whereas AttachmateWRQ focuses on multi-host access, integration, security and desktop management products.

AttachmateWRQ was formed by the merger of Attachmate and WRQ in 2005, and is owned by an investment group led by Golden Gate Capital, Francisco Partners and Thoma Cressey Equity Partners.

The acquisition will put NetIQ in a much stronger financial position, says David Taylor, regional director for NetIQ Asia-Pacific.

“AttachmateWRQ has got some very strong financial backers and, to be frank, from a NetIQ perspective this [acquisition] is seen as a very positive move,” he says.

“As always there are discussions around the marketplace about companies acquiring other companies. This has been going on for a long time — it’s the way our industry works. But, finally, this is being put to rest for NetIQ and our future is very clear,” he says.

There will be no overlap in technology between the companies, Taylor says. AttachmateWRQ’s products and NetIQ’s products will be complementary.

“We understand this move and the thoughts behind it. It makes perfect sense. If we were being acquired by a company which had competing technologies and products that would have created a degree of uncertainty,” he says.

AttachmateWRQ and NetIQ will be able to sell into a combined customer base of around 40,000 customers.

“That is a huge opportunity for us,” says Taylor. “NetIQ has about 5,000 customers at the moment.”

The acquisition will also mean that NetIQ becomes a private company. There will also be some reduction in NetIQ’s staff.

“Our headquarters in San Jose will no longer be required, for example,” he says. “Those kinds of functions will move to AttachmateWRQ’s headquarters in Washington.”

NetIQ has about 820 employees around the world. At this stage, Taylor does not know if staff in the Asia-Pacific region will be affected by the reductions.

NetIQ will be run out of Houston, Texas, as a separate business unit. The company’s development facilities in Houston and Raleigh will remain.

NetIQ acquired Kiwi software company Marshal Software in 2002, but sold the Marshal product suite in December last year when Marshal’s CEO Ed Macnair, previously head of worldwide sales of Marshal products at NetIQ, initiated a management buyout. At the time, Taylor said the reason for selling the Marshal technology was that it didn’t fit into NetIQ’s business strategy, which is a KBSA-strategy (knowledge based service assurance).

It is possible that Marshal was sold off to make NetIQ more streamlined for the acquisition, but Taylor wouldn’t comment. “I don’t have that amount of knowledge,” he says.