Sterling snaps up TI?s software arm

Sterling Software is to merge its Texas Instruments (TI) software operation into the company, creating a $360 million application development business.

Two weeks ago, TI Software agreed to sell up to Sterling, for $165 million in cash (PC Dealer, 23 April). When the deal is completed, Sterling will merge TI Software into its own application tools unit and both product lines are likely to be combined and jointly branded within a year.

The purchase has meant that Sterling will plug a weakness in its lifecycle product, Key, because TI?s tools are seen to be stronger at the implementation end.

Sterling UK marketing manager Paul Francis said: ?We will gain TI?s 700 customers, and its channels will be of great benefit. TI is also stronger in Europe, while Sterling?s main base has been in the US.?

The next few weeks will address product overlaps and decide the future of staff and executives. Both firms said the products are largely complementary and there would be ?no significant disruption?.

TI Software president Bob McLendon is expected to become president of the combined unit. Last year, the division had a turnover of about $250 million, compared with $109.8 million for Sterling?s development division.

Both companies said they expect to offer jobs to nearly all of TI Software?s employees. Terry Booth, UK head of TI Software, said: ?Acquisitions normally fail because employees leave. Sterling is well aware of that.?