Corel expanding graphics offerings by buying Micrografx

Software maker Corel Corp. is adding to its stable of applications by acquiring business graphics software vendor Micrografx Inc.

In an announcement today, Ottawa-based Corel said it will acquire Micrografx in a $32 million stock-for-stock transaction as part of an ongoing corporate growth strategy it unveiled last January.

"This is clearly a strategic opportunity for both Corel and Micrografx," said Derek Burney, president and CEO of Corel. The acquisition will help Corel capture a larger chunk of the technical illustration market, he said, and will help the company create new products for customers.

Also important in the deal will be the expansion of Micrografx's Enterprise Process Management division, Burney said. "We will become a major force in what is for us a new and lucrative market, while at the same time utilizing those technologies to broaden our portfolio of creative product applications," he said.

Louise Hanlon, a Corel spokeswoman, said the acquisition will also allow further development of several technologies by the cash-strapped Micrografx.

The deal, which is expected to close during Corel's fiscal fourth quarter in August or September, is subject to regulatory approval and approval by Micrografx's shareholders.

Chris Le Tocq, an analyst at Guernsey Research in Los Altos, Calif., said Dallas-based Micrografx had "fallen on hard times" with its graphics, flow-charting and diagramming products and faced tough competition from Corel and San Jose-based Adobe Systems Inc.

That's probably why Corel stepped in, LeTocq said. "In general, Corel has a business process of acquiring small graphics companies and is aiming to challenge Adobe."

Corel sells a full line of business productivity and graphics software applications, including its WordPerfect office suite.

In January, Corel announced that it would spin off its Linux operating system business and focus on graphics tools as its main source of future revenue growth (see story).

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