ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, October 8, 1996 TAG: 9610080069
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
BUYING CHEYENNE Software should help Computer Associates International appeal to customers using Windows NT. Some say it's paying too much, though.
Computer Associates International Inc. announced on Monday an agreement to buy Cheyenne Software Inc. for $1.2 billion cash.
The deal gives Computer Associates, the biggest maker of business software, a new product that helps companies manage and store data on their local computer networks.
The latest acquisition for Computer Associates intensifies a frenzy of technology-related mergers. The proposed marriage is the second this year for Cheyenne.
It gives Computer Associates a major selling point with companies that use Windows NT. The Cheyenne software is compatible on Microsoft's fast-selling operating system for businesses.
Cheyenne Software surged on the news that Computer Associates was paying $30.50 a share. The stock rose $7.62 1/2 a share to $30 as the most active issue on the American Stock Exchange.
Computer Associates stock, meanwhile, rose $1.75 a share to $64.50 on the New York Stock Exchange.
Cheyenne also makes an anti-virus software, which is growing in demand as companies hook their computers up to the Internet.
``The fit is tremendous,'' said C.A. chairman and chief executive Charles B. Wang. ``As Windows NT becomes more popular, the discipline of storage management is one of key components.''
Some analysts said the deal was no bargain, though. Crook predicted it would take the ``near-term wind of out of C.A. stock'' because Computer Associates ends up paying $50 million a year in interest to borrow money for the purchase.
Both boards already approved the merger. Computer Associates, a $3.5 billion company, said existing cash and loans would cover the purchase. Cheyenne had $250 million in revenue last year. Completion of the deal is subject to federal antitrust review and shareholders' acceptance.
In May, software maker McAfee Associates Inc. withdrew a $1 billion offer after Cheyenne rejected the deal.
This past summer, Computer Associates said it would go ahead with a $1.8 billion purchase of rival software maker Legent Corp. after agreeing to conditions set by government antitrust regulators.
Computer Associates, based in Islandia, N.Y., said it would keep all of Cheyenne's 800 employees. Cheyenne, based in Roslyn Heights, N.Y., will operate as a division of Computer Associates, which has 9,000 employees.
LENGTH: Medium: 55 linesby CNB