CA Inc. (CA) Closes Acquisition of Automic Holding GmbH

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CA Inc.CA recently completed its previously announced deal to acquire Austrian business automation software company, Automic Holding GmbH for 600 million euros ($635 million). The deal, which was announced last year on Dec 1, is a major development for CA.

About Automic

Founded in 1985, Automic helps organizations to solve complex business applications whether on location; on premise or in the cloud. It has roughly 600 employees across Europe, North America and Asia. Some of the world's largest companies such as Bosch, Netflix, Inc. (NFLX), eBay, Exxon Mobil, Vodafone, General Electric and Swisscom depend on Automic for their automation needs. We believe the association will strengthen the cloud computing business of CA and make it a complete service provider.

Deal Benefits

The company expects to utilize the automation solutions provided by Automic and expand its DevOps portfolio. Further, the acquisition will broaden CA's portfolio and enable it to better serve its patrons with a complete solution to address the needs of automation across the enterprise.

This acquisition marks the continuation of CA's strategy to grow inorganically, which strikes a balance between making investments for further growth and returning cash to shareholders.

Post Integration

Following the completion of the merger, Todd DeLaughter, Automic's chief executive officer, stepped down from his position and was appointed as general manager of CA.

Further, Automic's leadership team will continue to report directly to DeLaughter, whereas he will report to CA's chief product officer Ayman Sayed.

Last Words

We remain encouraged by CA Technologies' acquisition strategy, which has enhanced its IT management, software and services portfolio. Moreover, we believe that the breadth of its products and the increased efficiency offered by them will attract customers across sectors, lending stability to its business model.

CA has also adopted a "go to market" sales strategy. This brings together all the commercial functions including sales, marketing, brand management, pricing and consumer insight. The integration of the marketing functions helps to lower costs, thereby improving the bottom line.

Apart from pursuing growth through acquisitions, the company is leveraging cloud computing to enable organizations to source the best components - internal, external, private cloud, public cloud, mobile and more - to construct the most competitive business applications without wasting much time and resource.

The company is also focused on providing advanced management and security software required by organizations to take full advantage of this evolution.

On the flip side, CA's shares have yielded a negative 5.7% return for the past six months, in stark contrast to the Zacks categorized Computer-Software industry's gain of 6.5%.

Competition from the likes of Oracle , International Business Machines and HP Inc. remain the near-term headwinds.

Competition from the likes of Oracle ORCL , International Business Machines IBM and HP Inc. HPQ remain the near-term headwinds.

CA has a Zacks Rank #4 (Sell).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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