The merger, which CA officials said was approved by both companies' boards, will enable CA, of Islandia, N.Y., to integrate Platinum's knowledge management and data warehousing tools into its Jasmine object-oriented database.
"This transaction provides tremendous synergies in products, markets and services with very little overlap, creating exciting growth opportunities for CA in many new and emerging markets," said CA President and Chief Operating Officer Sanjay Kumar in a statement.
The deal will be funded through a $4.5 billion credit facility underwritten by Credit Suisse First Boston, CA officials said. It will replace CA's existing $2.6 billion line of credit, the officials said.
Platinum officials in Oakbrook Terrace, Ill., said the alliance will benefit clients and employees.
"CA's recognition of Platinum's true value combined with its commitment to fairly compensate our shareholders makes this transaction a compelling value proposition for everyone involved," Platinum Chief Executive Officer Andrew Filipowski said in a statement.
Wall Street wasted little time in reacting to the deal. Shares of Platinum were nearly three times higher Monday morning on the Nasdaq, off slightly from a high of $28.69 reached at one point.
Computer Associates stock was down $1.75 at $32.12 a share.
Platinum reported operating income of $75.5 million, or 82 cents a diluted share, on revenues of $968.2 million for the year ended Dec. 31, 1998.
More details to follow.