Mobile middleware push
Sybase is to acquire mobile communications company AvantGo in a deal worth about $38m, the companies said on Friday.
Sybase, which makes software for corporate use including databases and portals, said AvantGo will be combined with its iAnywhere Solutions subsidiary. AvantGo's software lets people transfer data to mobile devices.
The AvantGo assets will help Sybase crack the market for the software and hardware needed to connect hundreds of wireless devices to corporate databases, said Sybase CEO John Chen.
IBM, Sybase and other companies sold about $700m worth of so-called 'mobile middleware' in 2002, Chen said. Market analyst IDC expects that figure will grow to $1.5bn by 2007.
"This gives us a quick jump-start into some new markets," Chen said on Friday during a conference call.
Specific financial details of the deal were not released.
AvantGo is best known for 'My AvantGo', its free consumer software that lets people check news and other information from handheld devices. Chen said Sybase intends to continue the My AvantGo service, which has about seven million users.
AvantGo has recently tried to push into the business market, a difficult task as companies have cut back on IT spending. In July, AvantGo laid off around 40 per cent of its workforce in a bid to cut costs.
Chen said more cutbacks will come. By year's end about 30 AvantGo jobs will be eliminated and a facility in Hayward, California, will be shuttered.
AvantGo's CEO left the company in September to pursue other interests. David Pratt was named interim president and CEO in October.
AvantGo lost $5.5m, or 16 cents per share, in the third quarter of the year, on sales of $4.5m. In the year-earlier quarter, the company lost $21.2m on sales of $4.9m.
In afternoon trading, AvantGo shares nearly doubled, rising to 96 cents per share by Friday afternoon trading. Sybase shares rose as well but by less than a percentage point.
Ben Charny also contributed to this article.