New York-based CA Technologies (CA) has signed a definitive agreement to acquire Texas-based enterprise software company Hyperformix Inc. Financial terms have not been divulged.
CA Technologies expects the deal to close by the end of the third quarter of fiscal 2011 (ending December 31). Following the acquisition, CA Technologies will integrate Hyperformix’s operations and intellectual properties with its Virtualization and Automation business.
Hyperformix develops solutions designed to deliver business insight into IT operations. The company is a leading provider of Virtualization Capacity Management software, which answers the customers’ critical IT needs arising during the installation of the Virtualization platform for setting up cloud infrastructure.
With the acquisition, CA Technologies will enrich its virtualization, automation, assurance and cloud-based portfolios. The existing level of virtualization and cloud strategies enables CA Technologies to mitigate the problem of “VM Stall” faced by customers during the conversion of a small portion of physical servers into virtualized machines. Hyperformix’s Virtualization Capacity Management offering will be of immense importance since the joint effort will ward off difficulties while setting up a matured virtualized cloud-based infrastructure.
As per the survey conducted by open-source systems management provider Zenoss, virtualization and cloud computing technologies will remain significant growth areas in enterprise IT environments. Based on this, we believe more clients will be inclined to deploy virtualized servers, thereby paving the way for strong revenue growth. Moreover, CA Technologies will extend its reach, adding Hyperformix’ clients and channel partners.
We remain encouraged by CA Technologies’ acquisition strategy, which has enhanced its IT management and security software and services portfolio. Last month, CA Technologies acquired Arcot Systems Inc. for a total cash consideration of $200.0 million. Earlier this year, the company acquired Nimsoft AS, 3Tera Inc. and Oblicore Inc.
However, we are slightly concerned about the intense competition in the software and cloud computing space from big players such as International Business Machines Inc. (IBM), Hewlett-Packard & Co. (HPQ) and Dell Inc. (DELL).
We currently have a short-term Hold rating (Zacks #3 Rank) on CA Inc.
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