CA Technologies (CA) agreed to pay $330 million in cash to
acquire privately-held Interactive TKO Inc., saying the software
provider's technology will add a new dimension to the company's
information technology management offerings.
CA, which makes software for mainframe and other corporate
computers, reported relatively stable operating profit for the last
few years, while it made significant cost cuts before and during
the recession. The company on Wednesday said demand for rapid
time-to-market and lower operational costs is driving IT
organizations to adopt new approaches, such as cloud services.
The company said the ITKO deal will help customers overcome
current organization limitations. CA said the combination of ITKO
with the company's other services will help it create services that
can be built, tested and delivered at an increasingly faster
pace.
The acquisition of ITKO, which should close within three months,
is expected to lower earnings in fiscal 2012 but add to the bottom
line the following year. ITKO reported revenue of about $39 million
for the trailing 12-month period ended March 31, more than double
the prior period.
ITKO President and Chief Executive Shridhar Mittal will join CA
as a general manager of the unit, which will become a division of
CA. CA expects the company's employees, which total about 120, will
also join the parent.
Shares of CA closed up 0.7% to $22.63 and were inactive after
hours.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com