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Under the terms of the deal, each SoftQuad common share will be exchanged for 0.4152 of a Corel common share at closing prices on 06 August 2001, valuing the deal at around USD37 million.
By acquiring UK-based SoftQuad and its XML-enabling technologies, Corel will add to the existing XML capabilities of its own WordPerfect product line, said the company.
Derek Burney, president and chief executive officer of Corel, said that the company intends to provide its customers with the tools required to deploy customised content across multiple delivery channels, including the Internet.
Burney added that SoftQuad's XML technologies would enhance the XML functionality currently enjoyed by Corel's customers in government and in the legal community.
Roberto Drassinower, chief executive officer of SoftQuad, said that Corel's XML developmental expertise would enable SoftQuad to accelerate the delivery of XML-based content creation, transformation and exchange solutions to the companies' shared customer base.
The deal with SoftQuad will extend the reach of Corel's operations, explained Greg Wood, communications manager for the UK, Ireland and Benelux at Corel.
Furthermore, the deal fits with Corel's corporate strategy of sustaining profitability and its earlier acquisition of Micrografx in July 2001, added Wood.
At the time of Corel's acquisition of Micrografx, Corel was reported to be struggling with declining demand for its graphics, word-processing and spreadsheet software products. Yet Woods defended Corel's financial position, saying the company has now enjoyed four successive quarters of profits and does not have any particular financial difficulties.
In addition, the company has carefully managed the monies it received from an earlier deal with Microsoft, he said.
In October 2000, Microsoft purchased 24 million of Corel's non-voting convertible shares for USD135 million.
Although this deal gave Microsoft a holding in Corel of about 20 percent to 25 percent, Microsoft does not have any particular influence over how Corel conducts its business, said Wood.
Corel develops graphics and business productivity applications on Windows, Macintosh, Linux and UNIX platforms.
SoftQuad develops XML-enabling technologies and commerce solutions for e-business, and was the first to market XmetaL, the XML content creation solution.
At 5:30pm GMT on Tuesday, Corel was up 4.94 percent in New York trading at USD3.40.
Corel is at http://www.corel.com and SoftQuad is at http://www.sq.com.
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