IT consulting group buys out Tumbleweed
A global software firm that specializes in collaborative business solutions announced Friday it is acquiring messaging security provider Tumbleweed Communications.Scotsdale, Ariz.-based Axway, a subsidiary of France-based Sopra Group, an IT consultancy, plans to pay $2.70 per share of all Tumbleweed stock.
"Tumbleweed is a natural fit with Axway," Tumbleweed Chief Executive Officer Jim Scullion said Friday in a statement. "We are confident that the combined product offering will benefit customers from both companies and increase long-term growth prospects."
Combined, Axway and Redwood City, Calif.-based Tumbleweed, best known for its managed file transfer and email encryption offerings and which recently announced an email firewall, will offer solutions for some 11,000 customers. The two firms already share a number of prominent clients, including JPMorgan Chase, General Motors and the federal Food and Drug Administration.
Mike Rothman, founder of Security Incite, an analyst firm, said he questions how Tumbleweed technology will integrate into Axway products. But a move like this one seemed inevitable for Tumbleweed, which went public in 1999 and has had consistent difficulty meeting Wall Street expectations.
"I view this as much of a financial transaction as anything else," Rothman told SCMagazineUS.com on Friday. "Tumbleweed had to do something fast. When you're going nowhere, anywhere is somewhere. All the shareholders will be happy to get their money out."
The merger, to close in the third quarter of this year, is expected to generate revenue of about $362 million in 2009.
