Embarcadero Technologies announced that they signed a definitive asset purchase agreement with Borland Software Corporation to purchase its CodeGear division. The transaction is expected to close in 30 to 60 days. By combining these comapnies in development tools and database tools, Embarcadero will be able to address the growing productivity and resource challenges companies face as a result of different applications and diverse database platforms. With more than $100 million in annual revenue and over 500 employees worldwide, the combined companies will operate under the Embarcadero Technologies name.

“The application and database development worlds are colliding and the synergies between these two companies make this union timely and logical,” said Orlando Bravo, managing partner of Thoma Cressey Bravo. “This acquisition will yield Embarcadero the financial strength, people and product innovation to aggressively address the demands of this evolving market,” said Holden Spaht, Principal of Thoma Cressey Bravo.

Customers and partners will benefit from Embarcadero’s ability to help fully integrate their application development lifecycle, automate error-prone tasks and increase their productivity.

In addition, Embarcadero gains a larger sales footprint to serve millions of software developers, architects, independent software vendors (ISVs) and database professionals worldwide. The combined market opportunity for Embarcadero and CodeGear products will represent more than 15 million users worldwide and is expected to grow by up to 10 percent annually, according to industry reports.

“Today’s announcement is great news for our CodeGear customers, employees, partners and the community at large,” said Jim Douglas, CEO of CodeGear. “This will give us the resources to be even more aggressive and focused on our core products and markets.”

CodeGear serves a range of Java and Windows developers through its JBuilder, Delphi and C++Builder product lines, as well as a new generation of web developers with its innovative products for the PHP and Ruby languages.

“CodeGear is a recognized leader with a loyal developer community and established global channels,” said Wayne Williams, CEO of Embarcadero Technologies. “By incorporating its strong product portfolio, Embarcadero will be positioned to expand into new markets and develop cutting-edge products that are a quantum leap for the industry. The combination of our companies will unlock enormous potential for our customers and partners.

Embarcadero expects to pay a purchase price of approximately $23 million to Borland for the CodeGear assets and Borland will retain CodeGear accounts receivables, which are estimated to have an approximate value of an additional $7 million. Other material terms will be disclosed in a Form 8-K to be filed by Borland with the Securities and Exchange Commission.

The transaction is expected to close by June 30, 2008. Until then, Embarcadero will continue to operate as an autonomous entity and CodeGear will remain a division of Borland Software. Once the transaction is closed, Williams will continue in his role and lead the combined business.

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