Macromedia Makes Pitch For Allaire

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January 16, 2001 (3:05 PM EST)

By Barbara Darrow & Maggie Benson,

SAN FRANCISCO -- Macromedia Inc. plans to acquire Allaire Corp. in a $360 million cash and stock deal, both companies said late Tuesday.

Under the deal, Macromedia (stock: MACR) will pay $3 per share in cash plus 0.2 shares of its stock for each share of Allaire (stock: ALLR).

"This gives Macromedia a Java application server, particularly a Java transaction technology," said Shawn Willett of Current Analysis. "It gives them the ColdFusion installed base, which is considerable."

Including Allaire's results, Macromedia expects to report pro forma earnings of about $1.70 per share on revenues of $630 million for its 2002 fiscal year.

Macromedia's headquarters is in San Francisco. Allaire is in Cambridge, Mass.

Macromedia also reported earnings of $16.2 million, or 29 cents per diluted share, for the third quarter of its fiscal 2001, vs. pro forma net income of $8.2 million, or 15 cents per diluted share, for the same quarter a year ago.

A former Allaire executive said the companies worked together years ago to integrate Allaire's ColdFusion and Macromedia's Dreamweaver site design tool. Allaire's ColdFusion allowed interactivity.

Observers had wondered when someone would make a move on Allaire, which has seen its stock swoon from a high of $180 last year -- later split to $90 -- to the $4 to $6 range recently. Last week, the stock started creeping up.

"This merger is a natural," said Macromedia chairman and CEO Rob Burgess. "Combining the technology and talent of Macromedia and Allaire will bring Web professionals a complete, accessible way to build engaging, dynamic websites and applications."

Jeremy Allaire, CTO of Allaire, will become CTO of Macromedia, reporting to president Kevin Lynch.