Merger creates US giant
SOFTWARE firms SoftKey Software Products, WordStar International and Spinnaker Software Corp will merge in a US$250 million move.
The complex three-way stock swap will create a company with estimated annual sales of $130 million.
The new venture will be the United States' 12th largest independent software company.
It will focus on selling consumer and home-office software through such mass-market outlets as CompUSA, Office Depot, Radio Shack, Walmart, Circuit City, Lechmere, Software Etc, BizMart, Walden Software, Sam's, Price Club and Costco.
The merger comes as smaller software companies are being heavily pressured by bigger rivals to spend and cut prices.
Michael Perik, SoftKey's chairman and chief executive officer, will be the chief executive officer.
Kevin O'Leary, SoftKey's president, will serve as chairman and David Seuss, Spinnaker's chief executive officer, will be the new company's consumer products division chief operating officer and president.
The companies said there would be ''substantial'' staff cuts and plant closures. WordStar, of California, and Toronto-based SoftKey had announced a preliminary agreement to merge on May 13. Spinnaker recently bought Power Up Software, which has $34 million in annual sales.
The companies said they expected the deal to be completed in November.
If the deal proceeds, SoftKey shareholders will represent 53 per cent of the new company, Spinnaker shareholders will hold 31 per cent and WordStar shareholders will own 16 per cent.