Editor's Note: Download the free ebook by ebizQ lead analyst Beth Gold-Bernstein and Gary So of webMethods, "Integration and SOA: Concepts, Technologies and Best Practices."

On April 5, 2007, Software AG announced the acquisition of webMethods. Frankly, I find this truly exciting news. While the consolidation trend is not exciting in itself (at this point there are few integration vendors left that have NOT been acquired) I think this acquisition is a true synergy. Each vendor has some very compelling solutions that are underappreciated in the market. Together the combination provides a complete infrastructure for SOA.

The analyst call was mostly about the CEOs and CFOs of both companies talking to the financial analysts. Hey, I get it, financial analysts, unlike us techie geeks, effect stock price. No technical analysts got to ask any questions, while a few financial analysts did have some technical questions.

Here’s the quick and dirty on the financial side. Software AG is offering a cash buyout of $9.15 per share, which is a 25.7% premium over webMethods closing price yesterday of $7.28. Karl-Heinz Streibich, CEO of Software AG, spoke about the synergies between the two companies which he thinks will add up to one billion Euro software giant. These include synergies in market areas, geographies and revenue streams. While Software AG's business is 56% Europe, 25% America and 19% rest of the world, webMethods business is 62%America, 26% Europe and 17% RoW. Combined the two companies will have 4500 customers including 1500 webMethods customers and 3000 Software AG customers. Clearly webMethods will help Software AG gain a larger presence in the Americas, something it has tried to do before unsuccessfully (do you remember SAGA?).

According to a chart taken from Gartner numbers, this acquisition is going to put Software AG as the #3 player in the leading SOA/BPM players.

IBM $387m
Tibco $199m
Software AG & webMethods $156m
Microsoft $155m
webMethods $122m
Oracle $116m
Sun Microsystems $102m
Sybase $ 68m
BEA $ 60m
Axway (SOPRA) $ 57m
Sterling Commerce $ 57m
Vitria $ 52m
Software AG $ 34m
Hitachi $ 30m
Fujitsu-Siemans $ 24m
SAP $ 18m