Peregrine Systems Buys Smaller Rival
Asset-management software company Peregrine Systems Inc. today agreed to buy rival Remedy Corp. for $1.08 billion in cash and stock to gain access to its small and mid-size customers.
Peregrine's software is also used by businesses to exchange goods, while Remedy makes help-desk and customer-service programs. Peregrine gains about 5,000 new customers through the purchase.
“We know this is a relatively large acquisition and as such will draw some skepticism,” Peregrine chairman & CEO Stephen Gardner said on a conference call. “We believe the risk/reward is very heavily tilted toward the reward.”
Shares of San Diego-based Peregrine fell $4.82, or 17%, to $23.99 in late morning trading. They had risen 46% this year. Mountain View, California-based Remedy rose $11.43, or 62%, to $29.77. The stock had risen 11% this year.
The acquisition is expected to close in late August or early September.