NEW YORK, JUNE 1 -- Computer Associates International Inc. said today that it has agreed to buy Uccel Corp. in a roughly $800 million stock swap that would create the world's largest independent software company.
The deal is the biggest conquest yet for Charles Wang, a 42-year-old native of China who founded Computer Associates 11 years ago and has built it through a mixture of internal growth and aggressive acquisitions.
Wang said he plans to make more acquisitions and remains confident the company can increase its earnings and revenue at a rate of 30 percent to 35 percent a year -- somewhat slower than the growth rate to date.
"It is a deal in which winners emerge from the start," Wang told reporters and securities analysts.
The purchase, which surprised analysts by its size, will unite the two dominant independent companies that sell systems software for International Business Machines Corp. mainframe computers.
Systems software is one of the fastest growing and most profitable segments in the computer industry because it helps customers get more use out of their existing computers and makes it easier to develop new applications, such as programs for banking or accounting.
"These two are by far the biggest arch-competitors in the systems software market," said Stephen McClellan, an analyst for Merrill Lynch & Co. "This is precedent-setting in terms of size."
Their combined revenue of $407 million in calendar year 1986 would have been the highest among independent software companies, although it was dwarfed by IBM's $5.5 billion in software revenue last year.
Computer Associates' $265 million in 1986 revenue made it the second largest independent software company last year behind Lotus Development Corp.'s $283 million and just ahead of the $260 million for Microsoft Corp., which currently is running ahead of Lotus in revenue. Uccel ranked eighth, according to Dataquest Inc., a market researcher.
In the area of systems software, "it's almost like . . . GM and Ford" uniting, said Ed Acly, an analyst for International Data Corp. in Framingham, Mass. He said the combined companies should put up a better fight against IBM, which is expanding in the area.
Computer Associates, which is based in Garden City, N.Y., gets about 80 percent of its revenue from systems software, and Dallas-based Uccel gets about 65 percent.
Through acquisitions, Computer Associates has become the fourth-biggest seller of personal computer software behind Lotus, Microsoft and Ashton-Tate Inc., according to Kathleen Lane, a Dataquest analyst. She said that the latest merger should allow it to expand its mainframe-type software down to the desk-top level.
In the deal, scheduled for completion Aug. 15, Uccel shareholders are to receive 1.69 shares of Computer Associates common stock for each of the approximately 17 million Uccel shares outstanding. That amounts to about $47.50 per Uccel share, based on closing prices Friday on the New York Stock Exchange.
Uccel's stock jumped to $43.50 a share in consolidated New York Stock Exchange trading today from $32 a share Friday.
Computer Associates stock slipped to $27.12 1/2 a share from $28 on the NYSE, lowering the current value of the deal to about $779 million. Investors apparently were concerned that absorbing Uccel would dilute the value of their stock, but Wang said he believes it will not, once costs are cut.
Uccel is 58 percent owned by Swiss investor Walter Haefner through Careal Holding AG of Zurich. Haefner, who has indicated his support for the merger, would hold about 25 percent of the shares of Computer Associates.
Wang would be chairman of the combined company and Anthony Wang, his brother, would remain as president and chief operating officer, the companies said. Uccel's chairman, Gregory Liemandt, said he would quit, but praised Computer Associates as "the best independent software company in the world."
Computer Associates had an after-tax profit of $36.5 million on revenue of $309.3 million in the fiscal year ended March 31. Uccel had net income of $17.2 million on revenue of $141.6 million in 1986.
Wang, who immigrated from Shanghai at the age of 8, has led Computer Associates in the purchase of 15 software companies since going public in 1981. But he said in an interview: "This is by far the most important milestone for us."
Wary of losing Uccel customers, Wang said the company will continue to sell, enhance and maintain all Uccel products while gradually moving them toward merger with Computer Associates products where possible.
The transaction is being accounted for as a pooling of interests rather than as a purchase and will be treated as a tax-free exchange to Uccel shareholders.