By Adam Ewing
Wall Strete Journal
Wednesday, January 9, 2008
Microsoft said it plans to buy Fast Search & Transfer of Oslo for $1.2 billion to expand into Internet-search systems for businesses.
"Enterprise search is becoming an indispensable tool to businesses of all sizes, helping people find, use and share critical business information quickly," said Jeff Raikes, president of the Microsoft Business Division.
As companies collect more and more data on their internal networks, complex programs are needed to dig deep into files and retrieve relevant documents. Enterprise searching helps employees look for information internally and also helps customers search a company's business site, a Microsoft spokesman said.
The offer of $3.54 a share is 42 percent more than Fast's recent average share price. Shares in Fast rose about $1.01, or 41 percent, to about $3.50, outperforming a broadly higher Oslo market.
Fast's board said it unanimously supported the offer and recommended that its shareholders accept the bid. The deal, which is subject to regulatory approval, is expected be completed in the second quarter. It requires the approval of 90 percent of Fast's shareholders.
Two of Fast's largest owners, Orkla and Hermes Focus Asset Management Europe, which hold 37 percent of shares outstanding, have accepted the bid.
Microsoft now holds a 10.1 percent stake in the company. Fast chief executive John M. Lervik said the sale would allow his company to take advantage of Microsoft's strong sales and marketing network.
The deal is a great move for Microsoft, said Trygve Lauvdal, an analyst at Norwegian bank DnB NOR, noting that Microsoft made its bid when Fast's share price was low.
"I would have hoped for a higher price, but considering the low trading, it is fair," Lauvdal said. He said that with holders representing 37 percent of shares supporting the deal, it is certain to go through.
"This is a really good buy for Microsoft, putting it straight into the top league," said Mike Davis, an analyst with Ovum. He said other large vendors might consider acquiring similar companies rather than working on their own solutions.