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Symantec to Purchase Rival Quarterdeck

Software: $65-million deal would give buyer well-known products made by struggling firm.

October 16, 1998|ASHLEY DUNN | TIMES STAFF WRITER

Symantec Corp., the maker of the popular software utilities Norton AntiVirus and Norton Utilities, said Thursday that it agreed to buy rival Quarterdeck Corp. for about $65 million, including the assumption of debt.

Under the deal announced after the market closed, Cupertino-based Symantec would offer 52 cents for each Quarterdeck share. The deal has been approved by the boards of both companies, but is still subject to the tender of a majority of Quarterdeck's shares.

Quarterdeck, based in Marina del Rey, finished down 3 cents at 44 cents a share in Nasdaq trading. Symantec ended the day 38 cents higher at $9.06, also on Nasdaq.

Rob Owens, a senior research analyst with Pacific Crest Securities in Portland, Ore., said the deal between the two companies appeared to be a good match, particularly for Quarterdeck, which has seen its stock pummeled in recent years as it tries to survive in the tough software utilities market.

As recently as 1995, the company's stock was trading above $30 a share. But interest in its products slipped and its stock price fell to the point at which it was on the verge of being delisted from Nasdaq.

The company is now best known for its Procomm Plus communications program and CleanSweep, a software un-installer. For the 12 months ended in June, Quarterdeck's revenue was about $57 million.

"Things have been difficult for Quarterdeck for a long time," Owens said. "This deal gives them an exit strategy. It's been a difficult business for them."

King R. Lee, interim president of Quarterdeck, said: "This deal will allow us to serve our customers best with Symantec's strong market and channel presence. With Symantec's competitive positioning, strong geographic presence and market leadership, Quarterdeck's leading technologies can be leveraged and offered on a world-class level."

Owens said Symantec would also benefit from the purchase because it would acquire several well-known products, especially CleanSweep.

Symantec was sued for alleged copyright infringement and theft of trade secrets by Santa Monica-based CyberMedia Inc., which claimed Symantec's Norton Uninstall Deluxe was derived from CyberMedia's competing product.

"We expect to further increase our technical leadership in desktop and enterprise utilities by integrating Quarterdeck's technology with ours," said Gordon Eubanks, Symantec's chief executive.

Symantec also produces WinFax Pro, a computer fax program; Visual Cafe, a development tool for the Java computer language; and pcAnywhere, a remote-control program for personal computers.

Symantec reported net income of $6.8 million, or 12 cents a share, for its second quarter ended Sept. 30, down from $20.6 million, or 35 cents, a year earlier.

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