Novell Spins Off Net Content Unit

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February 02, 2001 (2:03 PM EST)

By John Rendleman,

In partnership with Nortel Networks and Accenture, Novell Inc. Friday spun off its Net Content business unit, forming a subsidiary named Volera Inc.

Volera's focus will be on content networking products, including the integration of caching and content-management technologies, with the goal of delivering Internet content to customers quickly and efficiently.

Novell (stock: NOVL) is Volera's majority shareholder, and Nortel (stock: NT) and Accenture will hold minority equity stakes. Once those investments are finalized, which is expected within 90 days, Volera's main products will be two former Novell products, its Internet Caching System software, and its Content Exchange.

Volera will be established as a public company, and Novell, Provo, Utah, hopes to distribute its shares in Volera to Novell's shareholders by the end of 2002. Novell CEO Eric Schmidt will be chairman of the new company, and Simon Khalaf, the former general manager of Novell's Net Content group, will be president. Drew Major, former chief scientist and chief technology officer for Net Content, will be Volera's chief technology officer. The company will be headquartered in San Jose, Calif.

Rumors about Volera had circulated for some time, says Wasserstein Perella & Co. analyst Steve Dube, and it had been expected that Novell would partially spin off the Internet content business or bring in new partners in the unit.

Volera will receive $80 million in cash from Novell, Nortel, and Accenture. Nortel, in addition to taking a minority stake in Volera, has also agreed to conduct joint development and distribution with Volera.

Accenture will continue to supply services to Volera, as it has done with Novell's Net Content unit for the last six months. Those services include supporting Volera's sales, customer service, support, and business development operations.