Vitria Technology
Vitria got its start 12 years ago. In fact, the founders were a husband-and-wife team: JoMei Chang and Dale Skeen. They still collectively hold 29% of the company's stock.
Vitria's flagship product, BusinessWare, helps companies better manage complex business applications, databases, and Web services. For example, it can help streamline order fulfillment, insurance claims, and securities trade processing. As a result, it works with a variety of software solutions, such as those from Oracle
Unfortunately, the bad times in the tech sector still dog Vitria. For the first half of 2006, revenues fell from $28.8 million to $21.8 million. The net loss this year is $7.9 million.
Then again, the company faces intense competition from players like BEA
Skeen and Chang will buy back Vitria through an entity called Innovation Technology Group Inc. In fact, the financial risk looks very manageable. After all, Vitria has $54 million in the bank and the market cap is only $90.5 million. Based on the average closing price for the past 20 trading days before the buyout, the premium for the deal is only about 4.7%.
However, don't expect other bidders to come to the table. Interestingly enough, Vitria hired Jefferies
There are many small-cap software companies like Vitria. Furthermore, it's a good bet that a fair amount of them are exploring going-private transactions. But as seen with Vitria and other deals, it may not necessarily mean much of a premium for public shareholders.
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Fool contributor Tom Taulli does not own shares mentioned in this article.