ATLANTA-The deal is back on but the dowry is down. Dallas-based Sterling Software and KnowledgeWare, an Atlanta company headed by football great Fran Tarkenton, have had as many false starts on the way to a merger as Marla and The Donald.
First the companies announced on Aug. 1 that Sterling would buy KnowledgeWare for $135 million and expected to close the union on Nov. 1. Now the companies will merge, but it'll cost Sterling about $72 million.
At the time of the original announcement, KnowledgeWare had not released fourth-quarter results. Then the numbers came in and the marriage was iffy-if not off.
The results showed a fourth-quarter net loss of $15.4 million, compared with a 1993 fourth-quarter income of $2.8 million. Revenue was $30.4 million compared with $40.4 million for the same time last year.
In addition, KnowledgeWare then had to revise its results for the first, second and third quarters of 1994. The company realized a loss of $3.6 million over the first three fiscal quarters instead of the previously reported net income of $4.5 million.
KnowledgeWare restated the numbers to reflect unpaid bills owed by resellers and increased selling and marketing costs.
With a more accurate picture of what it was buying, Sterling again pledged its troth to KnowledgeWare, but at almost half the original price.
In addition, the company purchased KnowledgeWare's $15 million loan from IBM Credit Corp. and loaned KnowledgeWare an additional $7 million to bolster its cash flow.
The acquisition is still scheduled to close Nov. 1.