Template Software, one of the oldest fixtures along the Route 28 technology corridor in Dulles, has agreed to be acquired by Level 8, of Cary, N.C., for $49 million in cash and stock.
The sale, which was announced last week, should be completed in about three months, according to representatives from both companies. About 180 people work at Template's headquarters in Sterling. Level 8 executives said they intend to keep the office open, although its name will change.
Template develops and sells enterprise management software, which helps companies automate and link segments of their businesses. Level 8 sells similar products and approached Template in August to discuss a possible acquisition. Template executives agreed that the two companies would fit together well.
Template executives said they felt that they needed a partner to take a bigger piece of the enterprise application integration market, which is expected to grow to about $1.5 billion in the next three years.
"We want to dominate the [enterprise application] market space, and you need to be a big company to do that," said David Kiker, Template's chief technical officer.
"Template is a very good fit and culturally very similar," said Steve Dmiszewicki, Level 8's chairman.
Over the next couple of months, the two companies will hold meetings to "figure out where people go," said Arik Kilman, chief executive officer of Level 8. He said the acquisition should not have "a whole lot of impact" on employees.
At Template headquarters, reaction to the sale has been a mixture of fear and excitement, one employee said.
"Some [employees] are worried," said Kathi Knill, a senior technical writer at Template who commutes from Herndon.
"The development people I've talked to are thinking this is a great opportunity because they get to learn new technology," Knill said, "but people who are not involved [directly] in development are more worried." She added, "They could have technical writers in North Carolina."
"People are naturally nervous," Kiker said, adding that he has worked closely with Level 8 executives on how to make employees comfortable with the transaction. He said there are no layoff plans now.
Since its founding in 1978, Template has grown at a frenetic pace. Revenues have more than tripled since 1996. The company had sales of $42.6 million in 1988. An announcement that the company had made Deloitte & Touche's "Technology Fast 50" list of rapidly growing and innovative companies came on the heels of the acquisition news.
Level 8, founded in 1995, has pursued an aggressive acquisition strategy. Template is its third acquisition since the beginning of 1998.
Knill said Template management has told employees that it will announce details of the reorganization by the end of November. She said she is hopeful and won't send out resumes yet.