NaviSite on Thursday said it has agreed to acquire Surebridge in a cash and stock deal expected to broaden NaviSite's portfolio of hosted services to include business software from Microsoft, PeopleSoft and Siebel Systems.
Under the agreement, Navisite will provide two promissory notes for $39.5 million, subject to certain adjustments based on Surebridge's financials at closing, and issue 3 million shares of common stock valued at $14.7 million, based on Wednesday's closing price of $4.90.
The acquisition would create a $125 million technology services company with more than 1,200 customers, the companies said.
NaviSite, based in Andover, Mass., manages applications and software infrastructure for mid-market companies, as well as messaging applications built on Lotus Domino and Microsoft Exchange software. Surebridge, Lexington, Mass., hosts business applications from Microsoft, PeopleSoft and Siebel Systems.
NaviSite stumbled after the bursting of the dot-com bubble, when companies lost interest in the concept of subscribing to application services hosted over the Internet. The concept of renting software as an alternative to licensing it has gone through a revival in the last year, and NaviSite has managed to make a comeback by improving revenues and cutting losses.
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