Lotus Development Corp’s shares have followed the market down since it agreed to pay $70m in shares for Wayne, Pennsylvania-based Soft-Switch Inc, and as it wants the company and doesn’t want excessive dilution, it will now pay about $62m in cash. It needs Soft-Switch to provide the basis for closer integration between the forthcoming Lotus Communications Server and Soft-Switch’s enterprise messaging switches for integrating disparate electronic messaging systems. Specifically, the Soft-Switch EMX Unix-based multi-protocol messaging switch and IBM Corp mainframe-based Central system are to be integrated with the Lotus Communications Server. But as Lotus does not want to delay the launch of the Server, slated for the first half of next year, its first release will probably include little integration with the Soft-Switch products – although some components may be integrated by that stage. Although no time-scale was given for the fuller integration work, subsequent releases of the Server will incorporate the Soft-Switch functionality in stages, says the company. Other than the Communications Server integration, development work at Soft-Switch will continue in the same direction as previously and Lotus will continue to sell and support the Soft-Switch products. On a wider level, Lotus says it perceives the market for enterprise-wide communications to be an emerging and increasingly important business area for it, saying as companies re-engineer, the next big frontier is connecting to business customers and suppliers. The acquisition of Soft-Switch is seen as integral to tackling this emerging market. Soft-Switch will continue operating from its Wayne headquarters and Michael Zisman, its president, is now to become vice-president of a new Inter-Enterprise Commmunications Group, unit, where he will have joint responsibility for managing the unit with Larry Moore, vice-president of Lotus’s Telecommunications Services Group. Lotus says it will account for the transaction as a pooling of interests and that it will have an immaterial impact on its earnings per share for 1994. If federal regulatory approval is received, Lotus says the transaction should close within 60 days.
