Rational Commits to Pure Atria Merger

Programming tools vendor Rational Software will acquire its rival, testing specialist Pure Atria, in a merger valued at $850 million.

Rational, which sells tools to software programmers for blue-chip customers ? including Andersen Consulting, Barclays Bank, BT, EDS, Microsoft, Oracle and Siemens Nixdorf ? unveiled plans to take over Pure Atria last week.

The merged operation will comprise five firms, as both partners have bought competitors in recent months. Rational acquired SQA in February for $300 million and paid $23 million for Microsoft?s Visual Test software in October 1996.

Pure Atria was formed by the August 1996 merger of Atria Software and Pure Software. It later bought Integrity QA Software. The acquisitions are expected to contribute hefty costs to Rational?s Q2 to September.

But analysts have claimed that it will be too costly to merge the combined operation, causing both firms? shares to fall when the merger was announced last week.

Analysts have also said developers are not buying tools like Rational?s until they have decided whether or not to use Java as an alternative.

Tim Brennan, vice president of finance at Rational, said: ?There has been some nervousness about the acquisitions. There are tremendous details to work through.?

Following the announcement of the merger, Ronald Nordin, product VP at Rational and SQA former chief executive, resigned ?to pursue other business interests?.

Pure Atria CEO Reed Hastings will join Rational as chief technology officer.