Sterling Software Inc., a provider of electronic commerce systems, has acquired American Business Computer, the leading provider of Unix-based electronic data interchange software in North America.
The acquisition gives Dallas-based Sterling - the market leader in EDI translation software for mainframes, midrange computers, and personal computers - a dominant share in the Unix EDI market as well.
The move is significant for the company because Unix EDI translation software, which translates data into a standard format for transmission, is the fastest-growing segment of the EDI software market, according to BIS Strategic Decisions, a technology research firm, based in Norwell, Mass.
The market is expected to grow at an average rate of 40% a year over the next five years, said a BIS spokesman.
With the acquisition of Ann Arbor, Mich.-based American Business Computer, Sterling's share of the Unix EDI market has jumped from 6% to more than 50%, said Anne Vahala, vice president of investor relations. In addition, the company now has a 22% share of the total EDI software market, more than double the share of its closest competitors, Premenos Corp. and Supply Tech Inc.
Sterling had plans to develop a strong Unix product - similar to that of American Business Computer- to replace its existing Unix EDI software, which lacks the functionality to be competitive in that market, said Sterling officials. By acquiring American Business Computer, Sterling gets a Unix product a year earlier than if they had developed it themselves, officials said.
The company plans to sell the Unix software to more than 800 mainframe customers, because many of them are considering moving to Unix, officials said.
Sterling is now also positioned to sell EDI software to the government, since American Business Computer already has a foothold in that market.
Customers of both companies stand to benefit from the acquisition because they now have a broader array of multiplatform EDI products to choose from, said Ms. Vahala, adding that a Windows product will soon be available.
The operations of American Business Computer will be merged into Sterling's interchange software division, part of the company's elec-tronic commerce group. The interchange software division provides EDI translation software to more than 3,900 companies in the United States.
A recent focus of the division has been to hire people with knowledge of Unix, client-server technology, and advanced technologies such as artificial intelligence, said company officials. With the acquisition, the company gets a number of people with these skills.
American Business Computer's principals-- Kimba Vasquez, president and chief executive, and Patrick Davis, chief operating officer - will join the division's executive staff as vice president of business development and vice president of operations, respectively.
Sterling software has two other groups that focus on its major markets: the federal systems group, which provides technical services to certain sectors of the federal government, and the enterprise software group.
To bolster its enterprise software group, Sterling is acquiring Knowledgeware Inc., an Atlanta-based provider of client-server application development tools. This acquisition is expected to be complete by November.
Combined, the two companies will be the 11th-largest Software company in the world, with revenues in excess of $600 million.
The Knowledgeware acquisition is key for the company because provides a "quantum leap in client-server applications development," said Ms. Vahala. Knowledgeware has a broad range of client-server application tools to complement Sterling's enterprise software tools for mainframes, she said.
The acquisition provides Sterling with immediate leadership in the client-server applications development market, said Sterling officials.
Following the merger, Francis A. Tarkenton, chairman of the board and chief executive officer of Knowledgeware, will join the Sterling board of directors.
