In a continued push to renew itself, CA has announced plans to
acquire Nimsoft, a privately held supplier of system monitoring to
startups, managed service providers and cloud computing, for USD
350 million.
Nimsoft has developed monitoring capabilities for such online
systems as Google Apps for Business, Salesforce.com CRM, the
Rackspace Cloud, and Amazon Web Services' EC2 cloud infrastructure
services. In addition, Nimsoft can monitor the availability of
internal databases, applications, and physical and virtual
servers.
CA's chief executive officer, Bill McCracken, said Wednesday in a
teleconference announcing the deal, "Nimsoft has been extremely
successful in going after and getting customers" in the cloud and
managed service provider space."
Nimsoft will enable CA "to reach new customers, ones frankly that
we haven't been able to develop well over a couple of tries in the
past," he added in response to questions.
CA recently added a new business unit, Cloud Products and
Solutions, under its former mainframe senior VP, Chris O'Malley,
now executive VP of the business unit. Nimsoft marks its fifth
acquisition in 10 months.
CA purchased data center automation supplier Cassatt last June,
network service level monitoring provider NetQoS in November; and
IT service level management supplier Oblicore in January; and it
announced plans to acquire virtual appliance builder 3Tera in
February.
Through the Nimsoft product line, which will remain as stand-alone
products, CA plans to reach managed service providers and emerging
enterprises. CA defines an emerging enterprise as one with USD 300
million to USD 2 billion in revenues.
About a quarter of IT spending on software will be done by
companies of that size by 2013, CA expects. The company has
traditionally sold to the largest enterprises. In addition, CA
believes Nimsoft will give it entrée to companies in the
rapidly growing BRIC economies, Brazil, Russian, India and
China.
Nimsoft sells annual subscriptions for its products, and that
pricing model will continue, said Nimsoft President and CEO, Gary
Read, who will become a CA senior VP and general manager of the CA
Nimsoft business unit. Most existing Nimsoft employees will be
added to CA, he added.
"The market was moving so fast we were concerned that Nimsoft, by
itself, couldn't keep up," Read said in the teleconference.
CA CFO Nancy Cooper said Nimsoft was cash flow positive in each
quarter of calendar 2009. CA is about to close out its fiscal year
and plans to conclude the deal for Nimsoft before it does so March
31.
The purchase will be financed by cash on hand, CA said. The
acquisition is expected to have a dilutive effect on earnings
amounting to $.10 per share in the upcoming fiscal 2011, but will
accelerate its revenue growth in 2012 and maintain a break even
impact on earnings.
Nimsoft was established in 1998 and has 800 customers, including
almost 300 managed service providers. Its customers are located
primarily in the U.S. and Europe.