Corel Goes Private

prostoalex writes "Ottawa-based Corel, known for its CorelDRAW, WordPerfect, Painter and Bryce products, has been acquired by Vector Capital Corp. for $124 mln. with the intent to get de-listed from Nasdaq and Toronto stock markets and go private. 80% of shareholders approved the deal, according to the story. At certain points of its corporate history Corel was a Linux vendor and even partially owned by Microsoft. Microsoft paid $135M for 25% of the shares, so Vector Capital paying $124M for 100% stake looks like a pretty good deal." It's been over a month since this was first announced, but it's actually come to pass now.

Comments

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[RobertTaylor]

"Microsoft paid $135M for 25% of the shares, so Vector Capital paying $124M for 100% stake looks like a pretty good deal."

Microsoft paid that in 2000, the year when anyone with an understanding of Frontpage Express could get zillions in venture capital.

$124 million in 2003 however is a fair whack!

Well lets hope.

[jellomizer]

Now that Corel is no longer under the whims of stockholders they can actually get to making a really good product and focus on other platforms and finally declaired that they loss the Windows Market. Including a Good modern version of WordPerfect for linux (Not that crappy windows emulated version) and I hope they will be more Mac friendly.

Re:Well lets hope.

[Anonymous Coward]

It's sad to say, but as a company that is prone to jump on every band wagon and falling off - Corel simply lacks the direction needed to set the company strait. They take in good products, and they watch them spiral into oblivion.

If I were Corel, I would be setting up a relationship with Novell like yesterday. Novell will move to a Linux solution - and with the purchase of Ximian they seem to have some end user software package in mind as well. So why not try to get Word Perfect in there? If the Novell thing takes off they'd be sitting pretty well off as an office suite distributed with a buisness package where Microsoft can't touch them.

Word Perfect has better name recognition, but if they don't get their ass in gear, then open/star office will be the last nail in the coffin.

Re:Does anyone see IP issues inthe future?

[kfg]

Corel's attitude is now irrelevant.

What is that attitude of Vector Capital, for whom Corel is simply now an owned brand?

I think you might find that it's very different than Corel's traditional point of view.

KFG

Once bitten, twice shy.

[FreeLinux]

While I agree that your suggestion would be nice, I wouldn't hold my breath. The fact is that, even if Corel is not answering to shareholders anymore, they are still a for profit company and will do their best to generate profit.

Corel tried the Linux route, producing their own distribution and a few Linux native versions of their apps. That endeavour failed miserably and they abandonded the effort completey, similar to their plan to port all their apps to Java.

Having already failed in the Linux arena and "wasted" millions of dollars in the process, Corel is unlikely to revisit what was for them a boondoggle anytime in the near future. Frankly, I do not know where Corel is going to go. In all likelyhood they will develop for the most pervasive platform but, they are unlikely to make inroads against MS Word with Wordperfect and PhotoShop seems to have a firm grip on the would be Draw market. They need a new product and I'm not sure they know what that is.

poop.

[twitter]

$124 million in 2003 however is a fair whack!

Considering Microsoft pays about one billion dollars each time they lose an anti-trust lawsuit, $124 was nothing. They got to shut down a Linux distro and crippled Word Perfect, the then dominant comercial text editor and main competitor to Microsoft Office, Microsoft't big cash cow. It was a predatory practice and Corel decline in value of 75% reflects the result. 75% is much greater than the decline of other IT firms with as much going for them. Corell lost that value because Word Perfect lost it's market share, market share it could easily have maintained with it's Linux distribution. Lawfirms still use Word Perfect and they cry out for stable software underneath it. Had they been given that platform, they would have eaten it up and proved the value of a comercial Linux distribution five years ago as well as it is proven today. By purchasing 25% of Corel, Microsoft pushed back Linux competition five years, prevented an anti-trust lawsuit and gained all the fruits of predatory behavior. It saved them a minimum of a billion dollars and much more in lost sales revenue.

great advantage to Vector in free software.

[twitter]

a list of software companies owned by Vector. The majority of them seem to be the types of names you don't recognize unless you work in a specific field -- "enterprise software" tailored to a very specific business application. And like it or not, that usually means Windows these days.

So, by purchasing a company with experience porting software to free they could establish a distro and port all their other stuff to free and save themselves that many coppies of M$ dependence and development costs? What could be better for specialty software than that?

The direction Microsoft took Corel when they bought 25% of them and shut down their Linux work was obviously and disaserously wrong. Corel has continued to lose market share, even in government work where it once ruled. Hell, they used to rule the comercial text editor world. They did not lose out because Microsoft made something better, they lost out because Microsfot made Word Perfect into an expensive Windows only additional purchase most people would not make. They OS/2'd them, making Word Perfect more expensive than Word in all cases. That's easy to do when you own the platform and sell everyone else required libraries.

There is still a market and it seems obvious that Linux is the way to go. Those who remember Word Perfect want it back on a stable platform. It will cost less for Vector to do things this way and customers will get more of what they want.