Lotus Development Corp clearly believes that it needs to make a substantial acquisition and that there is no time to waste: having failed in its attempt to get Novell Inc to the altar, despite winning definitive agreement on merger terms, the Cambridge, Massachusetts company yesterday announced definitive agreement to acquire word processing software specialist Samna Corp of Atlanta, in a development that threatens to put Wordperfect Corp’s nose out of joint. An agreement between Lotus and Novell to set up common software support centres that would also include Wordperfect was intended to survive despite failure of the attempt to merge Novell into Lotus. Lotus has agreed to acquire Samna, developer of the Ami and Ami Professional graphical word processors for the Microsoft Windows operating environment, for $18.84 a share cash, about $65m all told, against Samna’s share price in the market of $10.875 ahead of the announcement. A substantial portion of the $65m acquisition cost will be allocated to purchased research and development expenses, resulting in a one-time charge of $40m to $50m against Lotus profits in the quarter in which the transaction is completed, which the partners hope will be the current one. Lotus shareholders are not likely to be very impressed by the price being paid for the acquisition, because Samna has been in a state of decline, reporting a $2.3m loss for 1989 on sales down 22% at $11.1m. The launch of Windows 3 by Microsoft has brought a significant turnround, with losses for the nine months of $1.2m on sales up 42% at $10.3m – and a profit of $145,000 in the most recent quarter.As well as the two word processors, Samna has a new information access product for Windows, SmarText, and offers its character-based Samna Plus IV for multi-user systems running Unix System V.3.2 and Santa Cruz Operation Inc’s Xenix. Samna will become the Word Processing Division of Lotus, operating from its present base in Atlanta under co-founder Said Mohammadioun, and Lotus will be hoping that the acquisition will prove happier than Ashton-Tate Corp’s diversification into word processing when it took over the now scarcely visible Multimate International Inc in 1985.
