History (1996): Cheyenne Software Absorbed by Computer Associates for $1.19 Billion

Cheyenne Software rejected a not-so-friendly acquisition proposition from McAfee Associates at the beginning of the year, only to accept a friendlier offer from Computer Associates International.

While it’s true that McAfee’s offer of $1 billion was less than the $ 1.19 billion offered by Computer Associates, both figures seem rather high compared to Cheyenne’s annual sales, $174.1 million for its fiscal year ended June 30, 1996 and net income of $27.2 million.

In fact, the agreement with Computer Associates actually consists of a merger agreement through a cash tender offer. A wholly-owned subsidiary of CA will purchase all outstanding shares of Cheyenne’s common stock for $30.50 per share.

CA intends to retain all of Cheyenne’s employees.

It is expected that Cheyenne will operate as a division of CA, and that it will continue to aggressively support its current distribution channel strategy, said CA chief executive Charles Wang. CA has 9,000 people and $3.5 billion in revenues for FY96.

A major battle is looming on the horizon between what will now be the 3 giants of storage management software: Seagate Software, CA, and Legato.